ISHONCH Loan

Up to the equivalent of UZS 28 billion

loan amount

From 16% per annum in UZS

interest rate*

Up to 120 months

repayment term

UZS, USD, EUR, CNY and other currencies

Loan currency

Good to Know

Terms and Conditions

Loan purposes:

general-purpose financing;
working capital financing;
purchase of fixed assets;
purchase of non-residential buildings and structures;
purchase of passenger cars, electric vehicles, freight and passenger vehicles, and special-purpose machinery.

A general-purpose loan may not be used to repay loans, interest or fees; provide or repay financial assistance; settle third-party debts; purchase securities or equity interests in companies; transfer funds to secondary accounts; or make payments under surety obligations.

Loan amount:

For legal entities:

general-purpose financing — from the equivalent of UZS 50 million to UZS 12 billion; subject to a positive opinion from the Micro and Small Business Department — up to UZS 28 billion;
for working capital financing or the purchase of fixed assets or non-residential property — from the equivalent of UZS 50 million to UZS 28 billion;
for the purchase of vehicles and special-purpose machinery — from the equivalent of UZS 50 million to UZS 6 billion.

For entrepreneurs operating without forming a legal entity — up to UZS 1 billion.

Loan term and grace period:

general-purpose financing — up to 84 months, with a grace period of up to 6 months;
working capital financing — up to 36 months, with a grace period of up to 6 months;
working capital financing under a master agreement — up to 60 months; each individual loan — up to 36 months;
purchase of fixed assets — up to 84 months, with a grace period of up to 12 months;
purchase of non-residential buildings and structures — up to 84 months, with a grace period of up to 6 months;
purchase of vehicles and special-purpose machinery — up to 60 months, with a grace period of up to 6 months.

General-purpose loans and loans for the purchase of fixed assets may be provided to hotels and preschool educational institutions for up to 120 months. When financing is provided from borrowed funds, the grace period is determined by the terms of the funding source.

Loan currency:

Uzbek soums;
US dollars, euros, Chinese yuan and other foreign currencies.

Foreign currency loans are not available to entrepreneurs operating without forming a legal entity.

Interest rate:

financed from the Bank’s own funds — from 21% per annum in UZS and from 12% per annum in foreign currency;
financed from borrowed funds — the cost of funding plus the Bank’s margin of at least 4% in UZS and at least 3% in foreign currency;
under special terms — from 16% per annum in UZS and from 8% per annum in foreign currency.

Special rates are applied based on a decision of the district or city task force for creating sustainable employment and increasing household income and/or applications received during regional visits by members of the Bank’s Management Board.

Repayment and disbursement:

repayment schedule — annuity or declining balance;
the principal is repaid monthly after the grace period ends, while interest is paid monthly;
a general-purpose loan may be disbursed in cash, transferred to a bank card or paid directly to a supplier, contractor or seller;
a purpose-specific loan is transferred directly to the supplier, contractor or seller.

When financing is provided from borrowed funds, the repayment procedure is determined by the terms of the funding source.

Loan security:

Property collateral of at least 125% of the loan amount is generally required, or at least 130% for related parties.

The following may be accepted as security:

real estate;
motor vehicles manufactured no more than 5 years ago;
special-purpose machinery manufactured no more than 2 years ago;
vehicles and special-purpose machinery purchased with loan proceeds;
cash collateral;
surety provided by a legal entity;
credit default insurance policy;
surety provided by JSC National Business Guarantee Company.

Special terms apply in the following cases:

property collateral is not required for special-purpose loans of up to UZS 5 billion;
the Business Guarantee Company may provide a guarantee covering up to 50% of the loan amount;
subject to a positive opinion from the Micro and Small Business Department, property collateral may cover at least 80% of the loan amount, while non-property security may cover no more than 45%;
vehicles and special-purpose machinery purchased with loan proceeds may be accepted as security.

Down payment:

Non-residential buildings and structures: at least 30% of the purchase price. If additional property collateral is provided, bringing the total collateral value to at least 125% of the loan amount, the down payment may be reduced to 10%.
Vehicles and special-purpose machinery: at least 20% of the purchase price. If additional property collateral is provided, bringing the total collateral value to at least 125% of the loan amount, the down payment may be reduced or waived.

Vehicles and special-purpose machinery must be purchased on the primary market.

Up to UZS 5 billion without property collateral:

This loan may be provided against non-property security for projects aimed at reducing poverty and increasing household income.

Key conditions:

a decision of the district or city task force;
a letter from the district or city khokim confirming consent to provide a surety;
the client must have previously obtained at least one loan, used it for at least 6 months and repaid it in full;
the company’s net assets must exceed the loan amount by more than two times;
a positive opinion from the Micro and Small Business Department;
engagement of families listed in the Social Registry in cooperative activities, calculated at UZS 50 million per family, or creation of at least one job for an unemployed person for every full or partial UZS 200 million of the loan amount.

The obligation must be fulfilled within 3 months of loan disbursement. If the required number of jobs is not created, the interest rate on the UZS-denominated loan will be set at 24% per annum from the date the breach is identified.

Additional surety:

In addition to the primary security, a surety covering 125% of the loan amount is required from a founder holding an ownership interest of 50% or more, or from several founders whose combined ownership interest is 50% or more. An individual entrepreneur must provide a personal surety as an individual. This requirement does not apply if the founder is a foreign national or foreign company, government authority, budget-funded organisation or joint-stock company.

“Ishonch” General-Purpose Loan Agreement

“Ishonch” Loan Agreement for the Purchase of Non-Residential Property

“Ishonch” Loan Agreement for Working Capital Financing

“Ishonch” Master Loan Agreement

“Ishonch” Individual Loan Agreement

Who is eligible for the loan:

Legal entities and entrepreneurs operating without forming a legal entity that qualify as micro or small businesses.

The customer’s place of business must be located within a 300 km radius of the Bank branch reviewing the application.

Key requirements:

the business must have been operating for at least 6 months and must have received business-related income during at least 3 of the last 6 months;
for legal entities, the charter capital must be fully paid up, while financial results and net working capital must be positive;
there must be no current overdue or non-performing loan debt or outstanding obligations recorded in Card Index No. 2;
the KATM credit score must be at least 200;
the debt burden must not exceed 100%; for loans of up to UZS 5 billion without property collateral, it must not exceed 50%. Subject to a positive opinion from the Micro and Small Business Department, a debt burden of up to 150% may be permitted.

The requirements relating to the period of operation, business income and debt burden do not apply to loans of up to UZS 300 million granted upon the recommendation of the assistant khokim responsible for the area in which the customer operates.

Key Documents:

loan application;
for an individual entrepreneur — registration certificate and a copy of the passport;
the founders’ consent to obtain the loan and pledge the company’s assets, where required under the Product Passport;
contracts for the goods, property or services to be purchased;
information on outstanding obligations recorded in Card Index No. 2, if the primary account is held with another bank;
balance sheet and statement of financial performance, where required under the Product Passport;
documents confirming the right to use the place of business, if the activity requires designated premises;
documents relating to the proposed security: cadastral documents, vehicle or special-purpose machinery registration certificate, and other documents depending on the type of security;
information from the Public Services Centre regarding changes to the company’s registration, if it has undergone re-registration within the last 6 months;
where third-party property is pledged or a surety is provided, documents relating to the pledgor or surety provider as specified in the Product Passport;
other documents required based on the specific features of the project.

ISHONCH Loan

Good to Know

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