Why is this important
The entry of a state-owned company into the capital of a private bank is a signal of government support for InfinBank and the expansion of its role in lending to SMEs. The Entrepreneurship Development Company was established to finance small and medium-sized businesses, and participation in the bank will allow directing preferential loans through InfinBank.
What happened
- Entrepreneurship Development Company acquired 15% of InfinBank’s shares;
- The information was confirmed on the Single Portal of Corporate Information and on the InfinBank website;
- The company was established in 2023 on the basis of the State Fund for Supporting Entrepreneurship, the founder is the Ministry of Economy and Finance;
- Other InfinBank shareholders: Mamatjanov, Abdusamadov, Azia Trans Terminal, Prestij Rielt.
InfinBank shareholders
- Farhod Mamatdjanov — individual;
- Parviz Abdusamatov — individual;
- Entrepreneurship Development Company — 15%, state company;
- Azia Trans Terminal LLC — legal entity;
- JSC Prestij Rielt LLC — legal entity.
The exact shares of the remaining shareholders are not disclosed.
On the Entrepreneurship Development Company
It was established on November 10, 2023, by the presidential decree “On measures to improve the system of financial support for small and medium-sized businesses”. The company replaced the State Entrepreneurship Support Fund.
Founder: Ministry of Economy and Finance.
Functions:
- Financial support for small and medium-sized businesses;
- Provision of concessional loans and guarantees;
- Participation in the capital of banks and financial institutions to expand lending to SMEs;
- Implementation of state programs to support entrepreneurship.
About InfinBank
Invest Finance Bank (InfinBank) is a private commercial bank operating since 2005 (formerly called Ipoteka-bank). It specializes in lending to SMEs, corporate clients, and retail services.
- Assets: approximately 5 trillion soums (approximately $415 million);
- Loan portfolio: about 3.5 trillion soums;
- Branches: more than 30 throughout Uzbekistan.
Context
The entry of a state-owned company into the capital of a private bank is an unusual practice for Uzbekistan. Typically, the state owns state-owned banks, while private banks remain independent. However, the participation of the Entrepreneurship Development Company is explained by the strategy of strengthening support for SMEs.
The 15% share gives the state-owned company significant influence on the bank’s strategy, but not the control package. This allows maintaining the private nature of management, but focusing on lending to SMEs through state programs.
Preferential loans through InfinBank: The state company’s participation allows for the allocation of preferential loans for SMEs through InfinBank at rates lower than market rates (20-25% instead of 12-15%). The bank is becoming a channel for implementing the state policy of supporting entrepreneurship.
Benefits for InfinBank:
- Access to affordable funding from the state company;
- Participation in state programs to support SMEs;
- Strengthening the reputation and trust of clients;
- Risk reduction through state guarantees.
Benefits for the state:
- Expanding the coverage of SMEs through a private bank with a developed network;
- More effective management compared to state banks;
- Diversification of entrepreneurship support channels.
Other shareholders: Farhod Mamatjanov and Parviz Abdusamadov are individuals, likely founders or major investors of the bank. Azia Trans Terminal is a logistics company. Prestij Rielt is a developer company. The diversity of shareholders indicates a wide base of investors.
Analogues: a similar model exists in other countries where state development institutions participate in the capital of private banks to implement socio-economic tasks (for example, the IFC participates in the capital of private banks in developing countries).
