IMPROVEMENT OF RELATIONS BETWEEN THE FINANCIAL AND CREDIT SYSTEM AND SMALL BUSINESS ENTITIES IN THE REPUBLIC OF UZBEKISTAN

Аннотация

This article describes the concept of small business and entrepreneurship, provides statistical data on the state of small business in the country, analyzes the dynamics of financial services to small businesses, identifies the causes of emerging problems in the business environment of small businesses and entrepreneurship, and suggests ways to improve the mechanism forlending tosmall businesses Keywords:small business, financial services, credit, lending instruments, negative factors, financing instruments, lending mechanism, algorithm for financing small businesses According to the new version of the law "On guarantees of freedom of entrepreneurial activity", business entities are legal entities and individuals who have undergone state registration in the established manner and are engaged in entrepreneurial activity. Smallbusiness entities are: 1.Individual entrepreneurs. 2. Microfirms with an average annual number of employees employed in manufacturing industries - no more than 20 people, in the service sector and other non-manufacturing industries -nomorethan 10people, in wholesale, retail trade andpubliccatering - nomorethan 5people. 3. Small enterprises with an average annual number of employees employed in the following industries: • light, food and construction materials industries, as provided by law — no more than 200 people; • metalworking and instrument making, woodworking, furniture industry, as well as other industrialand production spheres provided bylaw —nomorethan100people; • mechanical engineering, metallurgy, fuel and energy and chemical industries, production and processing of agricultural products, construction and other industrial and production spheres provided bylaw—nomore than 50people; • science, scientific services, transport, communications, services (except for insurance companies), trade and public catering and other non-production spheres — no more than 25 people. The number of operating small businesses and entrepreneurship enterprises in the Republic of page204 INTERNATIONAL JOURNAL OF ARTIFICIAL INTELLIGENCE ISSN:2692-5206,ImpactFactor:12,23 AmericanAcademicpublishers,volume05,issue02,2025 Journal: https://www.academicpublishers.org/journals/index.php/ijai Uzbekistan According to the statistics agency, the largest number of small businesses and entrepreneurship entitiesis observed in 2023over thepast fouryears. If over the period from 2020 to 2023there is atendency forthese enterprises to increase, then in 2024there is anoticeable rate of theirdecline by 107,347 units or 18.1%. Moreover, such a decrease occurs in almost all regions of the republic. The decrease in the number of enterprises recorded in 2024 is due to the reorganization and updating of data in state registers. One of the main problems faced by entrepreneurs is the high cost of borrowed financing. Often, potential entrepreneurs who have a viable business plan, but do not have sufficient start-up capital, do not have collateral. Entrepreneurs often either do not have sufficient information about the available business support tools, or are faced with a bureaucratic system when preparing the necessary documentation. Also, commercial banks practicallydonot offer special products forSMEs. page205 INTERNATIONAL JOURNAL OF ARTIFICIAL INTELLIGENCE ISSN:2692-5206,ImpactFactor:12,23 AmericanAcademicpublishers,volume05,issue02,2025 Journal: https://www.academicpublishers.org/journals/index.php/ijai Growth rates of financial services provided to small businesses and entrepreneurs, % The highest growth rate of financial services provided to small businesses is observed in 2023, then there is a decrease in growth rates by about 10%. The main factors that negatively affect the development of entrepreneurship are the high cost of financing, high taxes, features of tender procedures, limited access to land and real estate, difficulties in obtaining architectural and construction documents and permits. According to a survey of entrepreneurs, the following key problems ofthebusiness environment for small businesses and entrepreneurship were identified. page206 INTERNATIONAL JOURNAL OF ARTIFICIAL INTELLIGENCE ISSN:2692-5206,ImpactFactor:12,23 AmericanAcademicpublishers,volume05,issue02,2025 Journal: https://www.academicpublishers.org/journals/index.php/ijai In 2024, 5 laws and 101 decrees and resolutions were adopted that are quite important for entrepreneurs. The volume ofenterprises' funds in banks increased by 20trillion soums, reaching 107 trillion soums. Population savings increased by 25 trillion soums and amounted to 105 trillion soums. These indicators indicate the stable development of the banking sector and the strengthening of trust on the part of the population and businesses. By the end of 2024, the total volume of loans issued will amount to 275 trillion soums. In 2025, this figure is projected to exceed 300 trillion soums. Particular attention will be paid to increasing the share of loans for small businesses: in