Tashkent, Uzbekistan (UzDaily.com) — The limit on microloans for individuals set at 25% of the total loan portfolio is a positive step for the creditworthiness of banks. This is stated in a recent analytical report by Moody’s Ratings.

Starting from 24 July 2025, banks in Uzbekistan (Ba3, stable outlook) will be required to comply with this limit, which was set by the Central Bank of Uzbekistan (CBU). The measure is aimed at maintaining asset quality, diversifying loan portfolios, and reducing concentration risks in the microfinance sector.

Microloans in Uzbekistan are unsecured loans of up to 100 million soums (about US$8,000) with a term of up to 36 months. From Q1 2024 to Q1 2025, the volume of such loans grew by 84%, reaching 9% of the total loan portfolio of banks and over 40% of the total tier 1 capital.

According to Moody’s analysts, these restrictions will curb the rapid growth of microcredit, limit the debt burden on borrowers, and increase the stability of banks to long-term risks. The measures could particularly impact some rapidly growing neobanks, which will need to adjust their strategy and reduce the share of microloans. However, the transition period until January 1, 2029, will allow for a smooth shift and provide banks with enough time to adapt to the new regulatory requirements.

The maximum debt service-to-income ratio (DSTI) for microloans is set at no more than 50% of the borrower’s income. Banks are required to refuse a microloan if the borrower’s debt load exceeds this level.

The rating agency also expects that the new restrictions will lead to a reduction in deposit rates, as the rapid growth of microcredit was primarily financed through public deposits. The reduced demand for deposits may lower the cost of funding in the deposit market for traditional banks.

These measures by the CBU continue the policy initiated in 2023, when a similar 25% cap was imposed on auto loans. This slowed the growth of auto lending, but banks shifted their focus to microloans, which are now also subject to restrictions.