INNOVATIVE MECHANISMS AND PRIORITY DIRECTIONS FOR DEVELOPING THE LEASING SERVICES MARKET IN THE REPUBLIC OF KARAKALPAKSTAN: EVIDENCE FROM MARKET STATISTICS AND REGIONAL INVESTMENT STRUCTURE

Abstract

Leasing is widely recognized as a practical form of asset-based finance that can expand investment for small and medium-sized enterprises (SMEs) and municipalities when traditional collateral and long-term credit are constrained. This study develops an evidence-based set of innovative mechanisms and priority directions for strengthening the leasing services market in the Republic of Karakalpakstan—an autonomous region of Uzbekistan that faces significant infrastructure and climate-resilience needs in the Aral Sea area. The research uses a desk-based methodology combining: (i) analysis of Uzbekistan’s legal framework for leasing, (ii) national market statistics reported by the Leasing Association of Uzbekistan, (iii) official regional investment statistics identifying the financing structure of fixed-capital formation in Karakalpakstan, and (iv) benchmarking against international guidance on leasing-sector development and sustainable investment policy. Results highlight two important signals for regional policy design: Uzbekistan’s leasing market has expanded in transaction volume and portfolio size from 2023 to 2024, and Karakalpakstan’s fixed-capital investment is dominated by foreign investment and loans, while the share of domestic bank borrowing remains limited. Based on these findings, the paper proposes a practical mechanism package for Karakalpakstan centered on digital underwriting, vendor partnerships, municipal leasing programs, risk-sharing instruments, and targeted green leasing for climate-resilient and productivity-enhancing assets.