People in Uzbekistan spend more than half of their income on loan repayments

Forty percent of borrowers in Uzbekistan spend more than half of their monthly income on loan repayments. This figure was revealed in the Financial Stability Review for 2024, published by the Central Bank of Uzbekistan.

Rising debt burden

In 2024, the average debt burden of individuals, calculated as the ratio of total liabilities to income, stood at 34 percent. Among bank borrowers, 40 percent had a debt service-to-income (DSTI) ratio exceeding 50 percent, indicating that a significant portion of their income was directed toward repaying loans.

During the first half of 2024, 23 percent of loan agreements were issued to individuals without any officially declared income. However, this figure dropped to 13 percent in the second half of the year. Banks also began to apply higher risk assessments to loans issued under exceptions to the DSTI requirement, helping to mitigate risks associated with the rising debt burden.

Concerns are mounting over the growing number of borrowers with multiple loans. This trend increases the risk of financial contagion between banks. A default by one over-leveraged borrower could simultaneously affect the asset quality of multiple banks. In 2024, 68 percent of individuals who took out loans held more than one credit obligation. Among recipients of mortgage and car loans, the shares were 48 percent and 42 percent, respectively. This figure was even higher among microloan borrowers, with 70 percent having taken out more than one loan.

 Scope of borrowing

Bank loans account for the largest share of the population’s total credit obligations. As of January 1, 2025, 5.3 million individuals in Uzbekistan had outstanding debts to either bank or non-bank institutions. Of these, 89 percent were indebted to banks, while 9 percent also held non-bank liabilities.

The overall debt burden of bank borrowers continued to rise slightly in 2024. On average, individuals with bank loans had a total debt burden of 34 percent, considering both bank and non-bank debts. Loans with a DSTI ratio exceeding 50 percent accounted for 40 percent of the total loan volume. Meanwhile, loans with DSTI levels between 26 and 50 percent made up 42 percent. Notably, 12 percent of borrowers had DSTI levels above 100 percent, placing them at high risk of default.

 Mortgage loans

One in five mortgage borrowers in 2024 spent the majority of their income on debt repayment. Specifically, 21 percent of mortgage loan recipients had a DSTI above 100 percent, while 39 percent maintained DSTI levels below 50 percent. The average DSTI among mortgage borrowers, including both bank and non-bank liabilities, was 65 percent.

 Car loans

Macroprudential measures have helped to alleviate the debt burden related to car loans. In 2024, the average DSTI for individuals with car loans stood at 61 percent. Regulatory changes introduced on July 1, 2024, contributed to this improvement. In particular, the share of auto loan borrowers with a DSTI above 50 percent dropped to 40 percent in the second half of 2024, a 23 percentage point decrease compared to the first half of the year.

 Microcredit

While microloan recipients had a lower debt burden compared to mortgage or car loan borrowers, their financial strain is intensifying. In 2024, the average DSTI for individuals with microloans, both from bank and non-bank institutions, was 34 percent. However, this category saw the fastest growth in debt burden. Starting from July 1, 2024, the debt burden threshold for microloan recipients will be eased, which may further influence this trend.