Uzbekistan SME Credit Market Shows Moderate Concentration, Regulator Says
Central Bank data shows the Herfindahl-Hirschman Index for SME lending in Uzbekistan reached 1,931, indicating moderate market concentration.
Uzbekistan's market for small and medium-sized enterprise (SME) credit is moderately concentrated, as per the Central Bank of Uzbekistan's inaugural financial inclusion report. The report indicates a Herfindahl-Hirschman Index (HHI) score of around 1,931 for this market.
The methodology employed in the report classifies HHI scores under 1,500 as low market concentration, scores from 1,500 to 2,500 as moderate concentration, and scores above 2,500 as high concentration.
The HHI score of 1,931, derived from data from the Central Bank's State Credit Information Registry, places the market in the moderate concentration bracket. This figure, the regulator observed, suggests the presence of multiple active banking institutions rather than a single dominant entity.
The Central Bank highlighted that the market's structure and the design of financial products significantly impact the financing choices and service conditions available to SMEs. Given the current level of concentration, it is crucial to continuously assess competitive alternatives, as competitive interest rates are not the sole determinant of a financial product's practical benefit to a business.
These findings on market structure are presented alongside a broader assessment of the service quality of SME financial products, which achieved an overall score of 43 out of 100. Within this assessment, savings product quality received 50 points, while credit product quality scored 41 points.
The evaluation of savings products considered factors such as the average interest rates on new time deposits for businesses, which were approximately 17.4 percent overall and 16.6 percent for rural SMEs.