According to S&P experts, the Central Bank of Uzbekistan is likely to continue to tighten lending requirements for citizens, which could limit growth in this segment. In its report, “Banking Sector Outlook 2024: Central Asia and the Caucasus,” S&P has outlined a scenario for the evolution of the lending sector in Uzbekistan. S&P predicts that both private and state banks will continue to expand lending to citizens and SMEs. As a result, competition in the sector is expected to intensify.
Financial institutions that invest heavily in automation and digitalisation are likely to gain a competitive edge, as they will be better equipped to meet customer needs.
The growth of the private sector, coupled with a favourable macroeconomic environment, is expected to continue to bolster corporate lending. This is particularly true for Small and Medium Enterprises (SMEs). The growth is likely to be driven by an increase in the population and citizens’ income, which are fuelling demand and driving loan growth in the retail segment. This trend is evident in mortgage loans, the car market, and unsecured consumer loans.
However, it is important to note that Uzbekistan has one of the lowest GDP per capita in the region, which may limit growth rates.
S&P previously noted a gradual improvement in the quality of regulation and supervision in Uzbekistan. However, it will still take time for the countries in the region to implement best practices and elevate banking sector regulation to a level comparable to that of developed countries.
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