Reduction in consumer lending in Uzbekistan: auto loans are declining while microloans are on the rise.

Uzbekistan, Tashkent – According to Podrobno.uz, the volume of loans granted to the population of Uzbekistan has experienced a decline for the first time in a long period over the nine months of 2024. Recent data from the Central Bank indicates that the total amount of loans to individuals decreased by 2.5% compared to the same period last year, totaling 73.1 trillion sums.

https://podrobno.uz/cat/economic/sokrashchenie-kreditovaniya-naseleniya-v-uzbekistane-avtokredity-ukhodyat-mikrozaymy-rastut/2024-11-12 08:12:28

Economist Otabek Bakirov notes that the reduction in retail lending, observed for the first time in years of open statistics, reflects dynamic changes in the market.

The auto loan sector has particularly contracted, which has always been a key segment of the retail credit market. Compared to last year, the volume of auto loans has dropped by 2.4 times—from 30.2 trillion to 12.8 trillion sums. Bakirov points out that the replacement of auto loans with microloans was an anticipated process.

"The demand for auto loans is gradually decreasing as banks, in an effort to mitigate risks, are expanding their range of smaller and more immediate credit products, such as microloans," the economist stated.

The data confirms this trend: the volume of microloans has increased from 20.8 trillion to 31.9 trillion sums, indicating a shift among consumers towards microfinancing to cover current needs.

Mortgage lending has also faced a decline this year: despite a slight increase in September, the overall trend remains negative. Interestingly, the volume of educational loans has nearly tripled, highlighting the changing needs and preferences of the population amid economic uncertainty.

Otabek Bakirov emphasizes that the reduction in retail lending may be a result not only of market saturation but also of growing financial concerns among the population, prompting them to seek microloans instead of larger credits.