The number of borrowers is continuing to increase in Tajikistan despite high interest rates. Today, nearly every fifteenth resident of the country owes banks. Some of them due to inability to repay a loan even go to the most extreme measure – suicide.
As of January 1, 2019, a total number of borrowers in Tajikistan reached approximately 570,000 people. Meanwhile, the number of loan debtors increased by 85,000 people in a year to December 31, 2018 (nearly 18 percent increase).
As of January 1, 2019, a total volume of provided loans exceeded 8.2 billion somoni (equivalent to 870 million U.S. dollars).
A loan portfolio increased by 500 million somoni (equivalent to 53 million U.S. dollars) in a year to December 31, 2018.
Many people take loans to meet their consumer needs, while some others are forced to take loans to pay for their children’s education, medical treatment, holding traditional rituals and so forth.
But not all of them can repay their loans due to high interest rates. In Tajikistan, a weighted average interest rate on consumer loans is 25 percent.
Therefore, many people loss mortgaged property, including houses, while some debtors try to hide abroad.
The most desperate borrowers go to the most extreme measures due to inability to repay the loans, down to suicide.
Thus, father of three children, a 52-year-old Komil Khoujabekov from the northern city of Isatrashan, committed suicide at the end of last year because of failing to repay the loan taken from Tojiksodirotbonk (TSB). He had taken a US$53,000 loan but managed to repay only US$15,000.
Several months before that, a woman from Istaravshan, Zebi, committed suicide after representatives of a bank threatened to take her house on account of the debt.
Meanwhile, Tajikistan’s non-performing loans ratio now stands at more than 30 percent, according to the National Bank of Tajikistan (NBT).
As of January 1, 2019, Tajikistan’s non-performing loans were reported at 2.6 billion somoni (equivalent to 275 million U.S. dollars), which is about one third of the total volume of the country’s loan portfolio.
Meanwhile, the Agency for Statistics under the President of Tajikistan noted last month that as of April 1, 2019, the country’s NPLs were reported at 1.805 billion somoni (equivalent to more than 190 million U.S. dollars), which is 20 percent of the total volume of the loan investments in the country .
About 33 percent of the non-performing loans was provided in the national currency, the somoni, and more than 67 percent of them was provided in foreign currency, according to the Agency for Statistics.
Tajikistan’s NPLs reportedly decreased by 73 million somoni in a year to March 31, 2019. As of April 1, 2018, Tajikistan’s Non-Performing Loans (NPLs) were reported at 1.878 billion somoni.
Addressing a meeting of senior representatives of fiscal agencies and banks, President Emomali Rahmon noted on May 10 that the high rate of non-performing loans in the baking system of the country evokes serious concern.
According to him, top managers of banks sometimes were providing loans to their relatives and friends without collateral.
8,406 citizens now owe 752 million somoni to banks, and 716 million somoni of 95 percent of them are non-performing loans, Tajik leader noted.
“Thus, top managers of the National Bank of Tajikistan in the previous years had provided 61 million somoni to their employees in non-interest loans and 16 million somoni of this amount became non-performing loans,” Rahmon added.
