The share of non-performing loans (NPLs) in Uzbek banks’ portfolios has tripled. As of January 1, it stood at 2.1%, while as of August 1 it had grown to 6.2%, Abrorhuja Turdialiev, deputy chair of Uzbekistan’s Central Bank, reported.
“This has happened following the rapid growth of the loan portfolio in the previous three years. We had a period when the portfolio grew by 55%. The consequences of the pandemic have also affected. The third reason is the fascination of banks with lending to the population”, Turdialiev said.
According to him, the share of loans to individuals in the total volume of NPL expanded from 17% to 28% in the first eight months.
The amount of loans to the population over the past three years has increased 3.3-fold. The growth rate was significant. Microloans dominated the structure of loans.
“From the very first days, we gradually took macroprudential measures, we set the maximum interest rate for a day and a year, we tried to form the right culture of the relationship between banks and the borrower as much as possible. We wanted banks to be as restrained as possible and not strive for high margins by issuing loans to bad borrowers. Despite this, growth is underway and will certainly continue. Because the demand of the population for banking products is only increasing,” Turdialiev noted.
He added that banks were not ready to settle NPLs in such volumes. In particular, there were not enough employees working in this direction, and the existing ones lacked knowledge and skills. (Uzreport/Business World Magazine)
