Dushanbe. June 24. “Asia-Plus” — Tajikistan’s banking system does not satisfy the needs of the country’s economy. Volumes of loans are very low, finance experts from the Association of Banks of Tajikistan (ABT) have said.
According to the results of analysis conducted in 2009, specific weight of credit portfolio of Tajik banks against GDP makes only 26,4%, the source said. “Despite those measures that are being undertaken and reduced refinancing rate, actual interest rates remain very high. This is mainly connected with the fact that deposits of natural persons and legal entities that are deposited in banks with high interest rates are being used as resources for these loans. To gain confidence of the population and make deposits more attractive, banks offer high interest rates,” experts have said.
According to ABT, in the first quarter 2010 average interest rate on fixed period deposits increased up to 19,21% against 16,92% in 2009. The increase was mainly connected with the wave of the global financial crisis and those measures banks have undertaken to prevent the outflow of deposits. Therefore, with highly expensive deposits, credit resources become also expensive. Thus, in the first quarter this year average interest rate has increased up to 22,72% against 22,63% in 2009.
Deposit base of Tajik banks as of April 1 this year has increased by 30% or 586,9mln Somoni as compared with the same period 2009 making 2544,6mln Somoni. Crediting of economy, which reduced in 2009, is also growing. In the first three months this year banks have issued credits worth 841,2mln Somoni. This is 160,7mln more as compared to the same period 2009. All these indexes of the first quarter 2010 indicate that Tajikistan’s banking system is now recovering from the consequences of the global financial crisis.
Experts outline a definite trend of reduction in terms of deposits. Terms of repayment of credits are also reducing. “Banks are issuing short-term loans due to lack of long-term resources. Major portion of deposits in banks is of short-term character and only 16% of deposits refer to long-term deposits with a period of more than one year,” ABT said.
Statistical data show that by the end of the first quarter this year an average period of deposits made 202 days against 239 days in 2009. Average period of allocation of loans has reduced from 348 days in the beginning of the quarter down to 332 days in the end.
In the conditions of financial instability banks secure themselves and are trying to invest funds into short-term and fast-payback projects.
ABT experts say that development of financial services will let provide both financial and banking markets of the country with cheap and long-term resources. “These resources may include saving pension funds, insurance funds. Additionally, there is a need to create favorable investment climate in the country to attract foreign investments, including investments into banking sector,” the source has said. Currently, the Government of the country has adopted Banking Development Strategy for 2010-2015, which was designed in collaboration with international financial institutes. This strategy will contribute to remove the existing problems.
