Credit Guarantees and Interest Rate Compensation for Small Businesses: Assessing Public Expenditure and Effectiveness (FINANCE MONEY AND CREDIT)

Summary

• Each UZS 1 of credit guarantees generated UZS 2.57 in lending (tied to UZS 27.354 trillion in loans), while UZS 1 of compensation commitments was associated with UZS 7.46 in lending (tied to UZS 49.953 trillion in loans).p.7
• Expected claims on the credit guarantee portfolio vary from UZS 0.17 trillion to UZS 1.70 trillion under default rate scenarios of 4% to 20% and recovery rates of 20% to 60%.p.8
• During January–September 2026, bank loans disbursed to micro, small, and medium enterprises reached UZS 121.7 trillion, an increase of 21.7% compared to the prior-year period.p.4
• Lending under dedicated entrepreneurship programs grew by 32.4% year-on-year to UZS 31.058 trillion in January–September 2026.p.4

Key insights

1. Reporting cumulative financial support as a single aggregate figure is misleading because contingent liabilities such as credit guarantees do not equate to direct fiscal cash outlays.p.3
2. The credit leverage ratio for interest rate compensation (7.46) is 2.9 times higher than that of credit guarantees (2.57), reflecting differing instrument designs and cash flow commitments.p.7
3. Under the most adverse scenario of a 20% default rate and a 20% recovery rate, expected guarantee claims equal 25.4% of total interest compensation commitment values.p.8
4. Presidential Decree PQ–49 introduced a performance-linked '2+1' principle requiring a minimum 15% annual revenue increase in year three for third-year interest compensation payments.p.10
5. A newly proposed Small Business Financial Support Effectiveness Index (KMSI) establishes a 6-block composite framework to measure additionality, employment, fiscal return, and loan quality.p.10
6. Statistical power calculations demonstrate that evaluating true additionality via difference-in-differences requires pilot samples of at least 1 000 to 2 500 enterprises per group.p.12