THE ROLE OF BANK GUARANTEES IN THE DEVELOPMENT OF SMALL AND MEDIUM-SIZED BUSINESSES AND THE SUPPORT OF TRADE

Abstract

Small and medium-sized enterprises (SMEs) play a vital role in economic development by generating employment and fostering innovation. However, limited access to finance remains a major constraint for their growth. Bank guarantees serve as effective tools to reduce credit and performance risks, enabling SMEs to obtain financing, participate in tenders, and engage in trade activities. This article analyzes the mechanism and types of bank guarantees, examines international best practices, and evaluates the current state in Uzbekistan. It concludes with recommendations to improve the guarantee system, raise awareness among SMEs, and enhance institutional support to promote trade and business development.