ADB: Leveraging SME Finance Value Chains Tajikistan

The Asian Development Bank Institute Working Paper No. 1020 (October 2019) by Shuhrat Mirzoev and Ravshan Sobirzoda, titled “Leveraging SME Finance through Value Chains in Tajikistan,” analyses the outlook for small and medium-sized enterprises (SMEs) in Tajikistan. The paper states that despite 27 years of robust economic growth, Tajikistan remains the poorest and least developed country in Central Asia, and that economic growth averaged 6.3 percent annually since 2010, with poverty halved to less than 30 percent during 2000–2017. It reports that in 2017 the size of the economy was about US$7.1 billion with per capita GDP close to US$813. The report states that remittances represented 49.6 percent of GDP in 2013 (the highest recorded figure as a share of GDP) and had declined to 35.5 percent of GDP by 2017, and that the Asian Development Bank argues growth would be as low as 3.1 percent if remittances were excluded. The paper states that about 181,000 Tajik nationals remain banned from entering the Russian Federation, and that the somoni lost more than 70 percent of its value against the dollar during 2015–2018. It states agriculture employs about 60 percent of total employment, up from 41 percent in 1991, while manufacturing employment declined from 46 percent to 17 percent during 1991–2016. The report states that SMEs contribute approximately 30 percent to GDP compared to the OECD average of 50 percent, and that state-owned enterprises account for 51 percent of GDP and over 30 percent of total employment. It states the non-performing loans ratio rose above 50 percent of all assets by early 2017, the capital adequacy ratio declined to 11.5 percent in March 2016, and that SMEs received 31 percent of all bank loans in 2017 compared with 50.1 percent in 2010.