According to a UNDP study, 27% of the population (entrepreneurs) in Uzbekistan avoid bank interest.
A press conference was held with the participation of representatives from the Capital Market Development Agency on improving the regulation of the securities market. Speaking at the event, Tursunboy Makhkamov, First Deputy Director of the Capital Market Development Agency, spoke about the advantages and disadvantages of sukuk securities, their positive and negative impact on the market, and the results of a study conducted by the United Nations Development Program (UNDP). The report on the results of the study will be made public on November 25.
“According to the study, 27% of the population (entrepreneurs) in Uzbekistan avoid bank interest. This means that they either do not deposit or do not receive a loan. For this 27% of the population, the instrument we are using – sukuk securities – must be very acceptable.
Another advantage is that sukuk securities have a mandatory condition – you definitely need to say where you are directing the money when you attract it. This means it is targeted. You definitely need to know under what conditions, in what situation, for what purpose your money will be used.
Another positive aspect is that if you want to measure your risk level on sukuk securities as an investor, you can measure it and reduce the risk level,” Kun.uz correspondent quotes Tursunboy Makhkamov as saying.
The first deputy director of the Capital Market Development Agency also spoke about the disadvantage of sukuk.
“From the issuer’s point of view, we can say that it is a slightly more difficult instrument for the issuer in terms of organization. It will be necessary to open a separate enterprise that will issue it. There may be a downside to a corporate bond in terms of cost or time spent on the structure,” Makhkamov said.