Baku, Azerbaijan, Oct. 2
Trend:
Commercial banks of Uzbekistan received the right to provide microloans along with microcredit organizations, Uzbek media reported.
The Senate (upper house) of the Uzbek parliament approved the relevant amendments to the legislation at the 16th plenary meeting on September 27.
The amount of microloans can be up to 100 minimum wages and is issued mainly in cash for up to 1 year.
At the same time, a ban is introduced on interest accrual, collection of commission payments and penalties (fines), application of other measures of liability under microfinance services agreements in the amount of more than half of the borrowing amount per year.
A representative of the Central Bank of Uzbekistan noted that presently, only 36 microcredit organizations are operating in the republic, while commercial banks have about 900 branches and 7,800 mini-banks in the regions.
Accordingly, because commercial banks aren’t able to provide microloans, the level of availability of this type of lending for the population is extremely low, and high interest on servicing microloans reduces their financial attractiveness.