Tashkent, Uzbekistan (UzDaily.com) — From January to December 2024, microfinance organizations and pawnshops issued loans totaling 16 trillion soums, an 85% increase compared to the same period last year, according to the Central Bank of Uzbekistan.

In 2024, the microfinance market expanded with the addition of new players, including 16 microfinance organizations, 8 pawnshops, and 151 branches (112 of microfinance organizations and 39 of pawnshops). As a result, the total number of these institutions reached 192, comprising 100 microfinance organizations (with 236 branches) and 92 pawnshops (with 71 branches).

The number of microfinance organizations with foreign capital increased by five compared to the previous year, reaching 20 in 2024 (12 microfinance organizations and 8 pawnshops).

The highest concentration of microfinance organizations and pawnshops is in Tashkent (44 microfinance organizations and 47 pawnshops) and the Fergana region (19 microfinance organizations and 4 pawnshops). In the Republic of Karakalpakstan and Kashkadarya region, only one head office is registered in each.

Regarding branches, Tashkent hosts 26 pawnshop branches and 24 microfinance organization branches, while in the Syrdarya region, these numbers stand at 2 and 5, respectively.

From January to December 2024, microfinance organizations and pawnshops issued loans totaling 16 trillion soums, an 85% increase from the same period last year. Of this, 89% (14.4 trillion soums) were provided by microfinance organizations, while 11% (1.8 trillion soums) came from pawnshops.

The lending growth rate stood at 104.5% for microfinance organizations and 10% for pawnshops.

Of the total loans issued, 15.2 trillion soums (94%) were allocated to individuals, while 963 billion soums (6%) were provided to legal entities.

The share of online loans in total lending over 12 months in 2024 reached 54%, marking an increase of 25 percentage points compared to the previous year.

The sharp rise in online lending is attributed to increased purchases of goods and raw materials by individuals through the "Uzum Market" platform, the "Uzum Tezkor" delivery service, and other retail points connected to "Uzum Nasiya." Significant contributions also came from the microfinance organizations "Shaffof-Moliya" (which issued 5 trillion soums in online loans) and "Tezcoin" (2 trillion soums).

Microfinance organizations are permitted to offer Islamic financial services, including "murabaha," "Islamic leasing," "salam," "musharaka," and "mudaraba." In 2024, 1.1 billion soums were issued under the "murabaha" format, while 7.4 million soums were allocated through "Islamic leasing."

The segmentation of loans issued to individuals from January to December 2024 revealed that 46% of loans were for amounts up to 10 million soums, 25% ranged from 20 to 50 million soums, 15% were between 50 and 100 million soums, and 14% fell within the 10 to 20 million soum range.

Notably, the share of loans in the 20–50 million soum category declined from 46% in 2023 to 25% in 2024. A similar trend was observed for loans in the 10–20 million soum range, where the share dropped from 16% to 14%.

At the same time, the volume of loans up to 10 million soums increased by 13%, bringing their share in total lending to individuals to 46%.

There was also a significant rise in large loans. Specifically, the share of loans between 50 and 100 million soums grew from 5% in 2023 to 15% in 2024. This increase is linked to legislative changes that raised the maximum microloan amount for individuals from 50 to 100 million soums.

The distribution of loans issued to legal entities by amount was as follows: loans ranging from 50 to 100 million soums accounted for 30%, those up to 50 million soums made up 29%, loans between 100 and 200 million soums represented 25%, those from 200 to 300 million soums stood at 14%, and loans exceeding 300 million soums comprised 2%.

Changes in the distribution of these loans over the year showed that loans in the 50–100 million soum category decreased by 21 percentage points, reaching 30%, while loans exceeding 300 million soums fell by 4 percentage points to 2%.

Conversely, the share of loans up to 50 million soums in total lending to legal entities increased by 25 percentage points, reaching 29%. Additionally, loans in the 100–200 million soum range grew by 1 percentage point to 25%.

As of January 1, 2025, the total assets of microfinance organizations and pawnshops stood at 8.4 trillion soums, 1.7 times higher than the same period last year. Specifically, the assets of microfinance organizations rose 1.8 times (by 3.4 trillion soums) to reach 7.9 trillion soums, while pawnshop assets increased 1.5 times (by 162 billion soums) to 498 billion soums.

Notably, 99% (8 trillion soums) of the total assets of microfinance organizations and pawnshops were allocated to credit investments. The growth in assets was primarily driven by a 1.8-fold increase in credit investments, including a 1.9-fold rise in microfinance organizations and a 1.5-fold increase in pawnshops. As a result, the share of loans issued by microfinance organizations and pawnshops in the total credit portfolio of all financial institutions in 2024 reached 1.5%.

The outstanding balance of microloans issued to individuals by microfinance organizations and pawnshops increased 1.8 times compared to the previous year, reaching 7.1 trillion soums. Consumer loan volume surged 2.5 times to 12.4 billion soums. The outstanding balance of microloans granted to businesses grew almost 2.1 times, reaching 379 billion soums. Leasing services expanded 8.5 times to 93.1 billion soums, while factoring services increased by 1.2 billion soums to 9.5 billion soums.

Non-performing loans (NPLs) in microfinance organizations increased by 0.3 percentage points since the beginning of 2024, reaching 2.4% (with an outstanding balance of 184 billion soums). This rise in overdue debt is attributed to the growing share of "doubtful" loans in the total loan portfolio, which climbed to 2.1%, while the share of "bad" loans rose to 0.3%.

The NPL coverage ratio declined by 4 percentage points compared to the same period last year, settling at 57% by the end of 2024. This decline is explained by the increase in non-performing loans in microfinance organizations, which grew by 97 billion soums in 2024, marking a 110 percentage-point rise compared to the previous year.

Total liabilities of microfinance organizations and pawnshops doubled in 2024 (up by 2.7 trillion soums), reaching 5.5 trillion soums. Specifically, the liabilities of microfinance organizations doubled (up by 2.6 trillion soums) to 5.4 trillion soums, while those of pawnshops tripled (up by 80 billion soums) to 121 billion soums.

As of January 1, 2025, the total liabilities of microfinance organizations increased by 97% compared to the same period last year, reaching 5.4 trillion soums. Of this amount, 16% was attributed to funds from founders, 47% to commercial banks, 7% to international financial institutions, 14% to local companies, 2% to bond issuance, and 14% to other liabilities.

The attracted funds included a 1.9-fold increase in founders' capital (by 397 billion soums), a twofold increase in resources from commercial banks (by 1.283 trillion soums), a 1.7-fold increase in funds from international financial institutions (by 154 billion soums), a 3.2-fold increase in funds raised from local companies (by 516 billion soums), and a 2.9-fold increase in funds from bond issuance (by 72 billion soums).

As of 1 January 2025, the total liabilities of pawnshops increased by 194% compared to the same period last year, reaching 121 billion soums. Of this amount, 64% was accounted for by founders' funds, 18% by borrowed funds from commercial banks, and the remaining 18% by other liabilities. In the structure of pawnshop liabilities, founders' capital increased 2.4 times (by 45 billion soums), resources from commercial banks grew 4.6 times (by 17 billion soums), and funds raised from local companies rose 5.4 times (by 19 billion soums).

The total capital of microfinance organizations and pawnshops increased 1.4 times (by 847 billion soums) as of January 1, 2025, reaching 2.9 trillion soums. Specifically, the capital of microfinance organizations grew 1.4 times (by 764 billion soums) to 2.5 trillion soums, while the capital of pawnshops increased 1.3 times (by 83 billion soums) to 378 billion soums.

The primary factors contributing to the overall capital growth of microfinance organizations included a 443 billion soum (54%) increase in charter capital, a 158 billion soum (23%) increase in current-year profits, a 122 billion soum (72%) rise in retained earnings, and a 41 billion soum (70%) increase in reserve capital. In the pawnshop sector, growth was driven by a 47 billion soum (39%) increase in current-year profits, a 33 billion soum (54%) rise in retained earnings, and a 14 billion soum (15%) increase in charter capital, while reserve capital decreased by 11 billion soums (51%).

Additionally, in 2024, the share of foreign capital in the total charter capital of microfinance organizations declined from 9.1% to 8.9% (by 112 billion soums), whereas in pawnshops, this figure rose from 16.8% to 17.3% (by 18 billion soums).

For the period from January to December 2024, the total revenue of microfinance organizations and pawnshops amounted to 3.4 trillion soums, while total expenses stood at 1.5 trillion soums, resulting in a net profit of 1 trillion soums. Specifically, microfinance organizations generated 3 trillion soums in revenue with 1.4 trillion soums in expenses, yielding a net profit of 833 billion soums. In the pawnshop sector, total revenue amounted to 354 billion soums, expenses to 138 billion soums, and net profit to 170 billion soums. Interest income accounted for 70% of total revenue for microfinance organizations, with 99.3% of this income generated from issued loans (financial services).

In the expense structure of microfinance organizations, 10% were non-interest expenses, 44% were operating expenses, and 46% were interest expenses. In pawnshops, non-interest expenses accounted for 11%, operating expenses for 81%, and interest expenses for 8%.

Regarding interest income generated from microfinance services, the segmentation of services shows that microloans account for 97–99% of the total.

The return on assets (ROA) of microfinance organizations decreased by 9 percentage points compared to the beginning of the previous year, reaching 19.4% as of the analysis date. The return on equity (ROE) declined by 23.7 percentage points to 40.5% as of January 1, 2025. This trend is attributed to the fact that the growth of net profit lagged behind the growth rates of assets and capital. Specifically, over the past year, the average volume of assets and capital doubled and increased 1.5 times, respectively, while net profit grew by 34%.

As of January 1 of the current year, the return on assets (ROA) for pawnshops stood at 55.6%, while the return on equity (ROE) was 52.0%. Throughout the past year, these indicators fluctuated within the range of 56–59% and 49–54%, respectively.