SMALL AND MEDIUM ENTERPRISE (SME) ADVANCEMENT THROUGH ESG-LINKED LOANS: THE ROLE OF BANKS AND MICROCREDIT ORGANIZATIONS

Аннотация

Small and Medium Enterprises(SMEs) account for more than half of
Uzbekistan’s GDP. A high share of SMEs is critical for economic development, and
access to finance is a key factor in their success. The fund transfer process through
ESG-linked loans will incentivize companies to fit into the ESG framework, thereby
providing SMEs with access to affordable finance while promoting sustainable
business practices. This study is mostly based on qualitative data taken from interviews
with bank employees and debtors. The study suggests expanding the governance of
banks beyond employees by providing guidance to customers for their type of business,
thus reducing doubtful debts, solving agency problems and contributing to the
green(circular) economy.