Tashkent, Uzbekistan (UzDaily.com) — The growing share of consumer and microloans in Uzbekistan signals an increase in the high-risk segments within the banking credit portfolio. This is stated in the report titled "Banking Sector Outlook for Central Asia and the Caucasus in 2025" by Standard & Poor’s.

The agency notes that banks continue to expand the volume of unsecured consumer lending and small and medium-sized business financing, aiming to increase the profitability of operations.

According to Standard & Poor’s, the measures taken by the regulator since 2023 have helped to curb the rapid growth of retail lending, reducing its growth rate to 20% in 2024, compared to about 50% in previous years.

However, the aggressive expansion of lending, intensified competition, including the active entry of foreign players, and the still-developing risk management culture will pose a serious challenge to the asset quality of rapidly growing banks, the agency’s experts added.

State-owned banks continue to dominate the sector, controlling around 70% of total banking assets. At the same time, the ambitious privatization program requires significant time and organizational resources. In order to become attractive to foreign investors, state banks will need to undergo a transformation process and improve key indicators.

Standard & Poor’s highlights that over the next two years, the banking system will face a number of serious challenges, including ongoing low financial accessibility and limited household incomes.

According to the Central Bank of Uzbekistan, as of January 1, 2025, the total credit portfolio of all commercial banks in the country amounted to 533.12 trillion soums, and the share of non-performing loans in the overall portfolio reached 4%.