Uzbekistan: Bonds and Belarusian experience for capital market growth

Tashkent hosted the VII International Conference "Capital Market of the Republic of Uzbekistan", which brought together regulators, infrastructure organizations, issuers and experts. The central topic was the role of corporate bonds as a systemic source of long-term capital for businesses. Industry representatives discussed mechanisms for localizing best international practices and the possibility of relying on the Belarusian model, where debt instruments have become a key channel for financing small and medium-sized businesses and a stable tool for investors in recent years. At the forum, a proposal was made to expand the use of bond borrowing in Uzbekistan, formalize the requirements for disclosure of information and offers, develop the secondary market and REPO operations, and expand the currency line of issues. The focus is on a combination of transparency, regular debt servicing, and availability of tools for private and institutional participants.

The Belarusian case demonstrates how consecutive issues, proven business reputation and secondary market liquidity gradually reduce the cost of borrowing for the issuer and risks for the investor. On the example of one of the companies, the sector showed maturity: dozens of completed placements, hundreds of transactions on the secondary market, a stable circle of private investors and the presence of institutional investors. This experience is particularly important at a time when the Uzbek corporate bond market is estimated to remain small relative to GDP, but shows high growth rates. Practical steps were outlined in Tashkent: standardization of issuers ' internal risk management procedures, regular audit, unification of covenants, provision of issues and a calendar of offers for the predictability of investor cash flows. Also on the agenda are the creation of a clear scale of market indicators and the development of market-making, which increases liquidity and facilitates pricing.

Subsidiaries of Belarusian players are already present in Uzbekistan and declare plans for local issues with a fixed coupon and discount securities with payment of income at maturity, secured by assets. The stated guidelines include the nominal value in the national currency, regular offers, monthly coupon payments and medium-term circulation terms. The strategic goal is to gradually increase the share of bonds in the capital structure and direct the funds raised to leasing programs for small businesses and households, which will expand access to investment for the real sector and work for employment in the regions. For the investor, this is a fixed income with transparent rules and reduced operational risk due to the provision and clear payment schedule. For the issuer — diversification of sources of financing, reduction of dependence on bank loans and lengthening of liabilities. For the system as a whole — the formation of a stable long-term money channel, the appearance of yield benchmarks and the development of a culture of public borrowing.

The synergy of international practice and local adaptation implies institutional changes: uniform disclosure standards for issuers, simplified access to listing for bona fide companies, development of HR competencies among market participants, increasing the role of ratings and analytics. Of particular importance is the secondary market infrastructure, which allows investors to flexibly manage their portfolio, and issuers to get a market estimate of the cost of capital. As programs scale up and the payment history accumulates, the corporate bond segment can become one of the drivers for financing long-term projects, including production modernization, equipment renewal, and service business development. For Uzbekistan, this is a step towards deeper financial intermediation and faster investment in the economy with a clear distribution of risks among all participants.