Tashkent, Uzbekistan (UzDaily.com) -- Experts from the Institute of Macroeconomic and Regional Studies analyzed the level of development of the sector of non-banking financial organizations as a source of investment in the economy.

In the global financial market, non-bank financial organizations (NFOs) are one of the main sources of satisfying aggregate demand for capital and mechanisms for supporting economic growth.

According to a 2023 report by the International Monetary Fund (IMF), the value of total assets of NFIs worldwide is US$160 trillion.

In recent years, the total volume of investments by NFOs in Uzbekistan has been growing steadily. If in 2020 the total investment volume of the NFO sector was 5.8 trillion soums, then in the first 6 months of 2023 this figure amounted to 9.1 trillion soums. In turn, the ratio of NFO investments to GDP over this period increased from 1.6% to 2.9%, respectively.

However, the current level of industry development lags behind the world’s leading developing countries. For example, the ratio of NFO assets to GDP in Thailand is 59.9%, in Kazakhstan - 12.7%, in Turkiye - 10.3%.

At the end of the first half of this year, leasing services accounted for 45.3% of investments by non-profit organizations, 38.7% of investments by insurance market participants, and 16.0% of trading volume on the stock exchange.

The total volume of the portfolio of leasing companies is 6.6 trillion soums, of which the main share falls on the leasing of agricultural machinery (36.0%), technological equipment (26.5%) and vehicles (26.0%). Simultaneously with the decrease in the share of banks in the leasing market, vehicle leasing is also sharply declining. This may be a consequence of banks’ active car lending policies.

The total investment volume of insurance companies is 5.1 trillion soums. Funds are allocated mainly to deposits (63.4%), purchase of securities (24.4%) and the real estate market (8.2%). Higher investment by insurance companies in bank deposits is due to rising interest rates on bank deposits, which are considered a less risky form of investment.

At the Uzbekistan Stock Exchange in January-June, the total value of concluded transactions amounted to 2.1 trillion soums. At the same time, 93.8% of transactions are in shares, 3.5% are in bonds, and 2.6% are in initial public offerings (IPOs). The smaller volume of corporate bonds indicates the need to improve the procedure for placing bonds on the stock exchange. This, in turn, allows businesses to use alternative sources of bank credit.

In order to develop the sector of non-banking financial organizations in Uzbekistan, it is proposed to implement the following measures:

To stimulate an increase in the volume of leasing to business and the population of modern technologies, such as energy-efficient solar panels and mini hydroelectric power stations in the structure of the portfolio of services of leasing organizations.

Increasing the activity of the insurance market through the widespread introduction of services such as life insurance and compulsory medical insurance.

Explore the possibility of privatizing the Republican Stock Exchange in order to further develop the securities market and increase the share of the private sector in the economy.