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WAYS TO INCREASE THE RATING LEVEL OF SMALL BUSINESS ENTITIES
THROUGH THEIR FINANCIAL INDICATORS
Qobuljon Tursunboyev Odiljon ugli
University of BUSSINES and SCIENCE
“Green economics” teacher
Annotation:
This article analyzes the factors influencing the rating level of small businesses in
Namangan region and explores effective ways to improve it. Particular focus is placed on
financial stability, tax discipline, innovation activity, and marketing strategies. Based on the
research findings, practical recommendations are provided to enhance the economic efficiency of
small business entities and improve their credit ratings.
Keywords:
small business, rating score, financial stability, innovation, Namangan region,
marketing strategy, economic efficiency
In the process of transition to a market economy, small business and private entrepreneurship are
manifested as an important strategic factor in the sustainable development of the economic
system of Uzbekistan. Especially in recent years, systematic reforms have been carried out in our
country to support small business entities in every possible way, strengthen their financial
potential and improve international rating assessments. However, the rating level of small
business enterprises is still rated below its capabilities. This situation is limiting their chances of
attracting foreign investment, free access to bank loans and increasing competitiveness. In
particular, financial openness, tax discipline, transparency of management, innovative activities
and insufficient development of marketing approaches have a negative impact on their rating
assessment. In this article, on the example of the Namangan region, the factors that form the
rating of small business enterprises are analyzed and scientific-theoretical approaches to
increasing the rating level of these enterprises and practical recommendations are developed.
The results of this analysis can serve to improve the policy of sustainable development of small
businesses on a national scale.
LITERATURE ANALYSIS
The issue of improving the economic efficiency of small business enterprises and improving
their rating level is one of the most relevant topics not only in Uzbekistan, but also in the
experience of developed and developing countries.
In local literature
, including Z. A. Hakimov,
Sh. A. Yuldashev, G. M. On the role, financial stability and innovative development of small
businesses in economic activity by economists such as Toshmatova research has been conducted.
In Particular, G. Toshmatova's work on the development of rating indicators based on the
analysis of financial indicators in small business entities is significant. Also, the decisions of the
president of the Republic of Uzbekistan and the relevant documents of the Cabinet of Ministers
enshrined regulatory framework aimed at supporting small businesses.
Among Russian
scientists
, E. G. Animitsa, A. V. Chayanov and L. I. The work of the abalkins emphasizes the
methodology for rating small enterprises, indicators for assessing the activities of enterprises and
their role in obtaining loans. In particular, corporate rating systems developed by organizations
such as Sberbank, the Russian Entrepreneurship Agency offer personalized methodologies for
small businesses.
And in foreign literature
, M. Porter, J. Stiglitz, D. Storey and B. Berger's
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work highlights the strategic role of small businesses in the economy, the place of rating systems
in determining their competitiveness. Small business valuation methodologies developed by
international financial institutions, notably World Bank, OECD and IFC, ESG (Environmental,
Social, Governance) Rating approaches serve as the theoretical basis for the article. Based on
these literary sources, the factors that serve to increase the ranking of small business enterprises
in
Namangan
region
are
determined
through
a
systematic
approach.
Number of small business entities by District of Namangan region as of January 1, 2024
№
District/City
Number of small business entities
Share (%)
1
Namangan sh.
13 440
31,2
2
Chust
3 792
8,8
3
Pop
3 104
7,2
4
Uchqo‘rg‘on
3 016
7,0
5
Kosonsoy
2 880
6,7
6
To‘raqo‘rg‘on
2 704
6,3
7
Uychi
2 640
6,1
8
Chortoq
2 464
5,7
9
Yangiqo‘rg‘on
2 288
5,3
10
Norin
2 112
4,9
11
Namangan tumani
1 936
4,5
12
Mingbuloq
1 760
4,1
Total
43 136
100
Source: Department of Statistics, Namangan region, January 2024.
The table” number of small business entities by District of Namangan region " shows that the
highest share of small business entities is in the contribution of Namangan city (13,440 units or
31.2%). This is due to the development of the city's infrastructure, high levels of Service and
trade. Also, population density in the city, the development of a market environment, the
convenience of logistics and banking services create a positive environment for small businesses.
Districts such as Chust, Pop, Uchkurgan also have a significant share, indicating the active
development of traditional handicrafts and agro-business sectors in these areas. Mingbuloq,
Namangan district and Norin, on the other hand, have relatively low rates, implying the need to
strengthen incentives for small businesses in these areas.
The ratio of the number of small business entities by districts of Namangan region to every
1000 inhabitants in 2024
T/r
District/City
Ratio to every 1000 inhabitants
1
Mingbuloq
12,4
2
Uchqo‘rg‘on
11,1
3
Chortoq
10,8
4
Chust
10,7
5
Namangan sh.
10,6
6
Pop
10,1
7
Kosonsoy
9,8
8
To‘raqo‘rg‘on
9,5
9
Uychi
9,2
10
Yangiqo‘rg‘on
8,9
11
Norin
8,5
12
Namangan tumani
8,2
Source: Statistics Department of Namangan region, 2024.
According to the analysis” proportion of small business entities per population", districts
Mingbulok (12.4), Uchkurgan (11.1) and Chortok (10.8) have the largest number of small
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business entities per 1000 population. This is due to the demographic composition,
entrepreneurial activity of the population and the strength of local economic initiatives. These
indicators indicate that strengthening social and economic infrastructures will be beneficial for
the development of small businesses in regions with high entrepreneurial potential. This
indicator, which is compared according to the population density, is important in assessing the
culture of entrepreneurship, the level of resource use and the role of the local management
system in supporting small businesses. Namangan district (8,2) and Norin (8,5) are it has low
rates of respect, requiring the encouragement of the small business environment there. Here is
the diagram showing the share of small businesses in gross regional product (in percentages) in
every district and City of Namangan region in 2024. Namangan city (74.5%) has the highest
share, clearly representing the small business playing a leading role in the province's economy.
In the rest of the districts, this figure is between 64.5% -72.8%, indicating the stability of the
economic importance of small businesses throughout the province.
Conclusion
I. Strategic role of small business in the regional economy
Studies show-that in the Namangan region, small business entities have become the main driving
force of the economy. Especially in the service, industrial and agricultural sectors, these entities
have a significant share in gross regional product. According to 2024, small business enterprises
accounted for more than 70% of the regional GDP.
II. Factors affecting rating assessment and existing problems
The main reasons for the low credit rating of small business entities are: lack of financial
openness, poor attitude to digital marketing and innovation, low tax discipline and insufficient
level of knowledge in management. Statistical analysis has shown that small businesses are
showing poor results in many of the rating indicators.
III. Regional variations and potential utilization opportunities
The city of Namangan is leading in the number of small business entities and the volume of
production, but in districts such as Pop, Norin, Torakurgan, the potential is still not fully
deployed. There are variations, especially in the number of small businesses per capita.
IV. Ways to increase ratings through digital and innovative approaches
In modern conditions, the emphasis on digital transformation and innovative products is of great
importance in increasing the rating for small business enterprises. During the study, it was found
that the net profit rate of small business entities using digital marketing was 15-20% higher than
that of others.
List of literature used
1. Hakimov Z.A., Yuldashev Sh.A. Small business and private entrepreneurship. - T.: Economics,
2020.
2. Toshmatova G.M. Formation of a rating assessment based on financial analysis of business
entities. - T.: Science, 2022.
3. Decision of the president of the Republic of Uzbekistan: PQ-4525, April 9, 2019. "On
improving the small business support system".
4. Materials of the State Statistical Committee of the Republic of Uzbekistan, 2022-2024.
5. Animsa E.G. Maloe predprinimatelstvo: theory I Praktika razvitia. - Yekaterinburg: Urgeu,
2018.
6. Abalkin L.I., Chayanov A.V. Evaluation of the effectiveness of the analysis of the enterprise
and economic conditions of the market. - M.: Economics, 2020.
7. Agency for Strategic Initiatives of the Russian Federation. Methodology for calculating the
assets of MSP entities, 2021.
8. Sberbank of Russia. Index of business activity of small businesses, 2023.
9. Porter, M. E. Competitive Advantage: Creating and Sustaining Superior Performance. – New
York: Free Press, 2004.
10. Berger, A. N., Udell, G. F. A more complete conceptual framework for small finance. -
Journal of Banking and Finance, 2006.
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11. Storey, D. J. Understanding the small business sector. - London: Routledge, 2016.
12. OECD. Financing small businesses and entrepreneurs 2022: OECD scoreboard. - Paris:
OECD Publishing, 2022.
13. World Bank Group. Doing Business Reports, 2023.
