Uzbekistan’s Microfinance Sector Grows by 7% in 2024

Uzbekistan’s microfinance institutions (MFIs) and pawnshops showed significant growth in 2024. The number of MFIs increased to 192, up by 7% compared to last year. The number of pawnshops also grew to 92, an increase of 4%. This announcement was made by the Central Bank of Uzbekistan.

This expansion means that more people and businesses across Uzbekistan have access to financial services. These services are especially important for individuals and businesses that may not have access to traditional bank loans.

Expansion in financial services

The microfinance sector saw an increase in the amount of loans provided. In 2024, the total loan amount reached UZS 3.2 trln (around $290 mln), which is a 12% increase from the previous year. Most of these loans went to small businesses, entrepreneurs, and the agricultural sector.

The size of loans has also increased by 15% in 2024, showing that businesses are seeking larger loans to expand. The loan repayment rate has remained high, with 97% of loans being repaid.

Growth in pawnshops

The pawnshop sector also grew in 2024. There are now 92 pawnshops, up by 4% from the previous year. These institutions provide short-term loans in exchange for personal property as collateral. The total value of loans issued by pawnshops in 2024 was UZS 1.5 trln (around $137 mln), which is an 8% increase from the previous year.

Pawnshops are increasingly popular as an alternative to traditional banks, especially for people who have limited access to credit. The average size of loans at pawnshops increased by 10% in 2024.

Regulatory changes and financial inclusion

The Central Bank of Uzbekistan has introduced new regulations to ensure that MFIs and pawnshops operate transparently and responsibly. These regulations help manage loan issuance and recovery more effectively.

The Central Bank is also focused on improving financial inclusion. In 2024, 70% of MFI clients were in rural areas, highlighting the expanded reach of financial services outside major cities. About 45% of the population now has access to formal financial services, compared to 30% in 2020.

Challenges and future growth

Despite the positive growth, there are some challenges. The quality of loans and consumer debt levels need to be closely monitored. The sector’s non-performing loan (NPL) ratio rose to 3.5% in 2024, up from 2.8% the previous year, indicating a need for cautious lending.

Looking forward, the microfinance sector is expected to continue growing, with more institutions entering the market and offering new services. The government is also working to improve regulations and support digital financial services, which will make financial products more accessible and efficient.

(*The figures are based on the exchange rate from February 19, 2025.)