Uzbekistan’s Central Bank introduced stricter lending requirements for citizens on July 1, significantly reducing the volume of consumer and car loans. The introduction of a debt load indicator has halved the volume of these loans in 1H24. During this period car loans totalled UZS 8.9 trillion ($714.2mn), representing a decrease of 2.07 times y/y. The peak months for car loans were January and May, each seeing UZS 1.7 trillion ($136.4mn) in loans.
Consumer lending also saw a substantial decline, falling from UZS 19.6 trillion ($1.6bn) to UZS 9.4 trillion ($754.3mn), a reduction of 2.1 times. May recorded the highest issuance of consumer loans at UZS 1.8 trillion ($144.4mn). The most pronounced decline in both consumer and car loans occurred in May, with lending volumes nearly four times lower than the previous year.
The Central Bank’s new debt load indicator measures the ratio of average loan repayments to the borrower’s average monthly income. This indicator, already used for micro-lending, ensures that borrowers do not exceed sustainable debt levels. Micro-loans are now limited to half of the borrower’s income. From 1 July 2024, the lending limit is set at 60%, with a planned reduction to 50% in 2025.
The bank has also introduced tighter requirements for mortgage and car loans. A loan-to-collateral ratio will now be considered when assessing the credit risk of borrowers, adding a layer of scrutiny to the lending process.
Daniyar Davletiyarov, general director of ADM Jizzakh car plant, noted that the Central Bank has imposed “tacit restrictions” on the issuance of car loans. He expects car sales to fall by 15% this year, down to 350,000 units.
