2007 SMEs. 2007 Large enterprises ... SME lending. Large enterprise lending ... support lending to micro, small or mediu
Banking Environment and Performance Survey II Country Profile
Tajikistan A weak credit information infrastructure holds back bank lending The north and south east of Tajikistan is well served by domestic bank branches with a few foreign banks in the larger cities (Chart 1). Tajik banks increasingly perceive these foreign banks as strong competitors in lending to various types of clients. Almost 90 per cent of surveyed banks cite participation in specialised lending programmes of the government or international agencies to support lending to micro, small or mediumsized enterprises (MSMEs) as “important” or “very important” in attracting new customers. In this competitive environment, Tajik banks mention the inability of their loan officers to adequately assess borrower risk as the main constraint to lending (Chart 2). This situation is very different from the rest of the region where banks generally report insufficient credit demand as the most binding constraint. The use of credit bureaus is almost universal in the rest of the region, whereas in Tajikistan all surveyed banks reported that no public or private credit bureau exists. This suggests that the absence of a functioning credit information infrastructure in Tajikistan, rather than a lack of funding, is currently Chart 1 Bank localities by ownership
holding back banking sector development. The BEPS survey also reveals that, perhaps as a result of the aforementioned inability of loan officers to assess credit risks, loan applications are subjected to a relatively high number of hierarchical layers before a bank is able to make a lending decision (Chart 3). When asked whether they “frequently” or even “always” have to make some irregular payments or gifts to court officials, 77 per cent of Tajik banks agreed that this indeed was the case (Chart 4). Not only is this the highest percentage in the CIS region, but it was also an increase on 2007. In sharp contrast, less than 20 per cent of Tajik banks agreed when asked the same question about the banking regulator. However, 43 per cent of Tajik banks, the second highest in the region, “agree” or “strongly agree” that direct instructions from the regulator over and beyond published laws and regulations presented their bank with a significant burden. In summary, Tajik banks appear to be increasingly worried about corruption among court officials, whereas they think the financial regulator is more honest though at times imposes a heavy regulatory burden. Chart 2 Main constraints to lending 3.0
Score on constraints
2.5 2.0 1.5 1.0 0.5 0.0
Localities with domestic banks only Localities with foreign banks only Localities with both domestic and foreign banks
Chart 3 Hierarchical decision-making layers of SME and large enterprise loan applications 3.5
0.7
Share of frequently, almost always, always
0.8
Number of layers
2.5 2.0 1.5 1.0 0.5 0.0
Loan officers could not assess risk Loan rates were low Bank lacked funding 2007 SMEs
2007 Large enterprises
Regional mean
2011 SMEs
2011 Large enterprises
All countries mean
Chart 4 Common for banks to pay some irregular payments or gifts to court officials
4.0
3.0
Insufficient credit demand
0.6 0.5 0.4 0.3 0.2 0.1
Tajikistan
Russia
SME lending
Moldova Belarus Ukraine Kyrgyz Republic Azerbaijan Mongolia Georgia Armenia Kazakhstan Large enterprise lending
0.0
Tajikistan Azerbaijan Kyrgyz Republic Armenia Mongolia Belarus Ukraine Moldova Russia Kazakhstan Georgia 2007
