Uzbekistan is considering introducing state regulation of the installment market. This was announced by the Chairman of the Central Bank, Timur Ishmetov, at a Senate session on June 26.
He noted that installment sales lead to inaccuracies in calculating the debt burden of the population, therefore, it is necessary for the state to control this area.
“The payment for goods and services in installments is becoming increasingly popular. As of January 1, 2025, the total portfolio of organizations engaged in installment sales amounted to 8.5 trillion soums. Of these, 26 percent are accounted for by two microfinance organizations operating under license, 7 percent by commercial banks, and the remaining 67 percent by business entities. Purchase and sale agreements with installments often do not specify the amount of overpayment or the real effective interest rate. This creates risks of excessive growth in the debt burden of citizens, as well as an increase in problem loans due to the inability to repay loans received from banks or microfinance organizations on time,” said the head of the regulator.
It is noted that Uzbekistan prohibits granting loans to citizens if their debt burden exceeds 50 percent. According to Timur Ishmetov, when applying for a loan to a bank, information about a person’s installment debts is not available. As a result, banks may issue loans exceeding the established level of debt burden. In this regard, the Central Bank plans to develop the necessary regulatory documents to regulate the installment market.
“Installment sales interfere with compliance with the standards of the debt burden of the population. Therefore, we are proposing state regulation of this market. We are not against the installment business. However, it is planned to introduce requirements into legislation obliging organizations providing installments to transmit information about customers’ debts to the credit bureau, as well as to disclose the amount of overpayment for the goods. If it were about small amounts, there would be nothing to worry about. But, as I said, 8.5 trillion soums is a substantial amount. Moreover, its multiple growth is predicted every year,” said the Chairman of the Central Bank.