MECHANISMS OF FINANCIAL SUPPORT FOR SMALL BUSINESSES AND THEIR EFFECTIVENESS

Аннотация

The effective functioning of financing mechanisms is of great importance for the sustainable development of small business and private entrepreneurship. Therefore, the analysis of existing financing instruments, the assessment of their effectiveness, and the search for ways toimprove them are urgent tasks. Key words:entrepreneurship, import, export, innovation, environmental resources, efficiency, information services, credit. Introduction.Today, small business and private entrepreneurship play a decisive role in the economic development of any country. In Uzbekistan, this sector accounts for 54.9% of GDP and employs more than 78% of the working-age population[1]. In recent years, the government of Uzbekistan has been carrying out large-scale reforms to develop small business and private entrepreneurship. By reducing state programs, tax benefits, and administrative barriers, a favorableenvironment forentrepreneurial activity is being created. The effective functioning of financing mechanisms is of great importance for the sustainable development of small business and private entrepreneurship. Therefore, the analysis of existing financing instruments, the assessment of their effectiveness, and the search for ways toimprove them are urgent tasks. The purpose of the study is to analyze the mechanisms of financing small business and private entrepreneurship inUzbekistan. Methods Small business is an important component of the economy of any country, and its sustainable development serves to create jobs in society, develop innovations, and increase the income of the population. However, small businesses often face the problem of a shortage of financial resources. Therefore, mechanisms of financial support for small businesses are of great importance. This essay analyzes the methods of financial support for small businesses and their effectiveness. page779 INTERNATIONAL JOURNAL OF ARTIFICIAL INTELLIGENCE ISSN:2692-5206,ImpactFactor:12,23 AmericanAcademicpublishers,volume05,issue03,2025 Journal: https://www.academicpublishers.org/journals/index.php/ijai Loans issued by commercial banks are one of the main tools for supporting small businesses. Today, bank loans are one of the important tools for ensuring economic development and financial stability. Current expenses of the enterprise, intended by entrepreneurs through loans for conducting and expanding business activities, acquiring fixed assets or expanding production capacities. 1. Forms of financial supportforsmall businesses Mainsourcesoffinancingforsmall businesses Stategrantsand Microfinancing Bankloans subsidies andmicroloans The state allocates grants and subsidies to support small businesses. This financial assistanceis aimed at stimulating entrepreneurs and solving socio-economic problems. Venture capital is important for financing new and innovative business projects. This mechanism is suitable for startups and high-risk projects. There is a system for issuing microcredits on favorable terms for small businesses. Microfinance organizations allocate low-interest loans for the development of small businesses.In addition, in order to expand access to loans, a system of guarantees for small businesses by state and commercial organizations has been established. At the same time, insurance services are offered to protect businesses from financial risks. In Uzbekistan, $1.7billion has been allocated to support smallbusinesses in 2023-2026. From October 1ofthis year to theend of2026.