ENHANCING THE EFFICIENCY OF INVESTMENT LOANS ISSUED BY COMMERCIAL BANKS IN THE DEVELOPMENT OF ECONOMIC SECTORS

Аннотация

This article analyzes the role of commercial banks in financing the real sector of the economy through investment loans. It examines the sectoral impact of bank loans, particularly their contribution to the development of industries such as manufacturing, agriculture, small business, and services. The author substantiates the need to increase the efficiency of long-term loans issued by commercial banks by diversifying loan portfolios, liberalizing lending conditions, and improving monitoring systems. Additionally, proposals are developed to ensure the profitability of investment projects through modern banking technologies and risk management mechanisms. Keywords:Commercial banks, investment loans, economic efficiency, financial resources, credit policy, bank monitoring, real sector, credit risk, loanportfolio. In a market economy, financial institutions-particularly commercial banks-play a vital role in ensuring sustainable economic development. In particular, bank-issued investment loans are a key financial tool for supporting investment activities. The modernization and technological advancement of economic sectors-such as industry, transportation, agriculture, construction, and services-depend directly on the availability of investment resources. In this context, long- term investment loans from commercial banks serve as one of the primary sources of financing. Relevant decrees and decisions by the President and Government of the Republic of Uzbekistan assign significant responsibilities to the financial sector, especially banks, in diversifying the economy, expanding the production of import-substituting and export-oriented goods, and implementing infrastructure projects. Therefore, improving the efficiency of investment loans allocated bycommercial banks isone ofthemost pressing issues today. Uzbekistan’s banking and financial system is gradually being reformed and aligned with international banking practices. This enables more efficient allocation of resources to the real sector through bank loans, support for small and medium-sized enterprises, the creation of new jobs, and the supply of competitive products to the domestic market. Furthermore, improving the mechanisms for analyzing the financial viability of investment projects, assessing credit risks,and strengthening monitoringsystems are crucial for enhancing economicefficiency. In a market-oriented economy, commercial banks serve as essential financial intermediaries that channel domestic savings into productive investments. Their role becomes especially crucial in ensuring long-term financing for sectors such as industry, agriculture, infrastructure, and services, all of which constitute the backbone of sustainable economic development. Investment loans, which are typically allocated for medium- and long-term periods, provide the page759 INTERNATIONAL JOURNAL OF ARTIFICIAL INTELLIGENCE ISSN:2692-5206,ImpactFactor:12,23 AmericanAcademicpublishers,volume05,issue06,2025 Journal: https://www.academicpublishers.org/journals/index.php/ijai financial base for acquiring fixed assets, modernizing production lines, introducing energy- efficient technologies, and fostering innovation withinenterprises. In the contextof Uzbekistan, thesignificance ofcommercial banks in financing real economic sectors has grown considerably, yet challenges remain. Despite institutional reforms in the banking system and macroeconomic stabilization efforts, commercial banks tend to favor short- term lending strategies due to the absence of stable long-term funding sources and underdeveloped mechanisms for risk mitigation. As a result, capital-intensive projects- particularly those situated in rural areas or within emerging industries-struggle to access the required investmentcapital. Moreover, deficiencies in project appraisal and monitoring systems further undermine the efficiency of investment loans. Many banks lack the analytical capacity to conduct comprehensive feasibility studies, assess long-term risks, or implement post-loan monitoring strategies. These limitations affect not only the allocation of financial resources but also the likelihood of project success and loan repayment. Small and medium-sized enterprises (SMEs), which are widely recognized as engines of employment and innovation, face additional barriers such as high collateral requirements and limited financial literacy, restricting their ability to benefit from investment credits.A particularly pressing issue is the inadequate diversification of loan portfolios. Data suggests that a significant portion of investment loans is funneled into sectors with rapid turnover-such as construction and trade-while key strategic industries like agriculture, renewable energy, and high-technology manufacturing receive insufficient financial support. This misallocation diminishes the transformative impact that bank-financed investment projects could otherwise achieve. To address these challenges, several strategic reform