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Support of anti-crisis program of Uzbekistan
government to financial sector In focus leasing
market of Uzbekistan
Mustafaev Z.B.General Director of Uzbekistan
Lessors Association
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Agenda

• Anti-crisis policy of Republic of Uzbekistan
  during the global financial crisis
• Macroeconomic indicators of Republic of
  Uzbekistan during the crisis and post crisis
  period
• Leasing sector of Uzbekistan current state and
  perspectives of development
• Case study analysis of development of leasing
  sector by example of JV Uzbek Leasing
  International A.O.

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The adoption of measures anti-crisis program
aimed at achieving the following key objectives

• 1st - it is further rapid modernization,
  technical and technological rearmament of
  enterprises, introduction of modern flexible
  technologies. At first it concern of basic
  sectors of industries, export-oriented and
  localized production.2nd - the implementation
  of specific measures to support exporters in
  ensuring their competitiveness at foreign markets
  in conditions of the rapid worsening of current
  conjuncture, creation of additional incentives
  for exports.3rd - improving the competitiveness
  of enterprises by introducing a strict regime of
  saving, stimulating the decrease of production
  costs and cost price. In 2008, approved the
  proposals by economic entities on the
  implementation of measures aimed at reducing the
  current year cost of production for at least 20
  percent in the leading sectors of our economy.

4
The adoption of measures anti-crisis program
aimed at achieving the following key objectives

• 4th - the implementation of measures to
  modernize the electricity, reduce energy
  consumption and implement an effective system of
  energy saving. Further improvement of the
  competitiveness of our economy, the welfare of
  the population is largely dependent on how
  sparingly and thriftily we will learn how to use
  existing resources, in the first place
  electricity and energy.5th - in conditions
  falling demand in the global market, a key role
  in maintaining high economic growth is to support
  domestic producers by stimulating demand in
  internal market.

5
Major outcomes of economic reforms in Uzbekistan

• Sustained high rates of economic growth
  (7-9 per annum on average), fueled mainly by the
  internal factors, have been provided

6
Major outcomes of economic reforms in Uzbekistan

• Sustained high rates of economic growth (7-9 per
  annum on average), fueled mainly by the internal
  factors, have been provided

7
Major outcomes of economic reforms in Uzbekistan

• Macroeconomic stability, internal and external
  balance of the economy have been ensured

8
Major outcomes of economic reforms in Uzbekistan

• Macroeconomic stability, internal and external
  balance of the economy have been ensured

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Major outcomes of economic reforms in Uzbekistan
Expansion of export potential and diversification
of export structure
Export structure, in 1990 1st half2011
Cotton 59,7 10,0
Foodstuff 3,9 5,0
Chemical production fertilizers 2,3 5,0
Energy and oil products 17,1 38,0
Ferrous and non-ferrous metals 4,6 7,0
Machinery and equipment 1,7 7,0
Services 0,04 16,0
Others 9,4 12,0
2000 year data
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Major outcomes of economic reforms
in Uzbekistan
Share of main sectors of economy in GDP (in
to GDP)
Sectors of economy FY2000 (in ) FY2011 (in )
Industry 14,2 24,1
Agriculture 30,1 17,6
Service 37,0 50,5
Including leasing services 1,02 1,2

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Dynamics of development banking institutions
Y1990 Y1995 Y2000 Y2005 Y2011
Number of commercial banks 16 32 35 29 30
Number of branches 2 389 3 171 4 238 7 028 9 516
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The main indicators of the banking system
Y2000 Y2005 Y2009 Y2010 Y2011 Sep.2012
Total bank capital, mln. USD 443 788 1 991 2 500 2 952 2 940
Assets of banks mln. USD 2 929 4 772 10 389 12 646 15 294 17 951
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Increase in the loan portfolio of commercial banks
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Provided incentives for further development of
the leasing sector in Uzbekistan

• Leasing equipment is exempted from VAT and
  customs fees
• Lease object is exempted from paying property tax
• Lease payments are exempted from paying VAT
• Decrease of taxable amount of turnover to the
  amount of payable interest
• Leasing service ventures are exempted from paying
  profit tax until January 1, 2017

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Uzbekistan Lessors Association

• Established in 2005
• Advocate member interests in interaction with
  government authorities
• Cooperation in elaboration of legislative base
  regulating lease services
• Assistance in business activity of entrepreneurs
  by means of promotion leasing services
• Facilitation of professional development of
  members
• Currently, there are 33 members of Association
• 24 leasing companies
• 9 commercial banks

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Dynamics of leasing share in GDP and in total
capital investments
FY Value of lease facility, Billion UZS Share of leasing in total capital investments, Share of leasing in GDP,
2001 18,7 2,21 0,37
2002 31,3 2,73 0,42
2003 36,6 2,67 0,37
2005 90,6 3,72 0,6
2006 131,1 4,22 0,63
2007 214,5 3,91 0,76
2008 351,6 4,15 0,95
2009 401,6 3,19 0,84
2010 430,3 2,8 0,7
2011 484,5 2,6 0,6
1st half 2012 252,9 2,5 0,6
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Leasing sector tendencies
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Dynamics of leasing operations development for
1996-2011 years
mln. USD
One-time operation on leasing 4 aircrafts
by National Bank of Uzbekistan for Foreign
Economic Activity is not included
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Dynamics of lease portfolio
Billion UZS
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Structural reorganization of lease objects
Technological equipment
Agricultural equipment
Vehicles
Property
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Distribution of lease transaction by types of
technological equipment
Y2012
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• Maybank
• (Malaysia)
• NBU

35
35
30
Shareholders
Uzbek-Oman Investment Company

• EBRD
• IFC

Shareholder of Uzbek Leasing International
A.O. until May 2012
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JV Uzbek Leasing International A.O.

• First Leasing Company in Uzbekistan
• Operations on the leasing market since 1996
• Solid shareholders
• Application of international standards in
• accounting and operational activity
• Over 500 projects were successfully financed
  for
• total amount of 85 millions of US dollars
• Credit lines from NBU, Maybank,
• IFC, EBRD, ICD, bank Asaka and
  export-credit
• agencies

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Number of new leasing projects
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Leasing portfolio of JV Uzbek Leasing
International A.O.
Billion UZS
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Our address

• 4th Floor, International
• Banking Finance Center
• 1, Beshyogoch Street
• Tashkent, 100066
• Republic of Uzbekistan
• Tel. [phone]
• (998 71) 140-77-44
• (998 71) 140-77-46
• Fax. [phone]
• E-mail uzlease_at_sarkor.uz
• www.uzbekleasing.com

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• Thank you for attention!

www.ula.uz
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The emergence of the crisis associated with the
following factors

• general economic development cycles
• imbalances in international trade and capital
  flows.
• overheating of the credit market and especially
  shown its consequence the mortgage crisis
• Credit expansion, launched in 1980 - the
  beginning of the 2000.
• And also
• high commodity prices (including oil)
• overheating of the stock market.

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The main indicators of the banking system
Y2000 Y2005 Y2009 Y2010 Y2011
Banks gross capital, bln. UZS 144 931 3 010 4 100 5 300
Assets of banks bln. UZS 952 5 631 15 703 20 740 27 453
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Increase in the loan portfolio of commercial banks