The development of social enterprises in Uzbekistan is important, especially in the light of the issues of employment and social protection of people not able to compete in the labor market, as well as to ensure the financial sustainability of Non-governmental organizations (NGOs). At the same time, the potential of social enterprises to address these issues is not fully employed. Thus, the number of social enterprises under Disabled People Organizations has decreased in 1991-2015 by 3.5 times. A low level of employment maintains among vulnerable groups of population. Only every twentieth NGO is attempting to earn money on their own, which often end up unluckily. The share of own financial resources in the structure of NGOs funds is only 7%.

The purpose of this paper is to analyze the role and potential of social enterprises in providing employment and social protection of vulnerable groups, as well as in ensuring the financial sustainability of NGOs.

In the paper:

1) the role of domestic social enterprises in addressing the issue of employment for socially vulnerable groups of population, ensuring financial sustainability of NGOs, expansion of social services rendered by these types of enterprises has been defined;

2) the experience of the pilot social enterprises set up by UNDP and the Ministry of Labour has been analyzed;

3) thebusiness environment for NGOs and their business entities, including tax, legal and other issues, has been assessed;

4) problems of the development of social enterprises have been identified and analyzed and the relevant recommendations have been developed.

The policy paper was developed within the joint project of the Ministry of Labour of the Republic of Uzbekistan and UNDP “Inclusive employment and social partnership”.

The results of the paper can be used within elaboration of issues (legal acts, etc.) on the development of social enterprises in Uzbekistan.