Tashkent, Uzbekistan (UzDaily.com) — The Central Bank of Uzbekistan has proposed introducing regulatory oversight for the country’s fast-growing installment payment market, also known as Buy Now, Pay Later (BNPL). The initiative was announced by Central Bank Chairman Timur Ishmetov during a Senate plenary session on 26 June, where the regulator presented its 2024 annual report.

As of 1 January 2025, the total credit portfolio associated with installment payments reached 8.5 trillion Uzbek soums. Of this amount, 26% is accounted for by two microfinance organizations, 7% by commercial banks, and the remaining 67% by various business entities.

According to Ishmetov, most installment agreements currently lack clear disclosure of either the total overpayment amount or the actual effective interest rate. This lack of transparency, he warned, contributes to a rising overall credit burden among the population and increases the risk of defaults and overdue debts, including those issued by banks and microfinance institutions.

The Central Bank chairman noted that existing regulations cap borrowers’ debt-to-income ratio at 50% for banks and financial institutions. However, the majority of installment obligations are not recorded in credit bureau databases, resulting in a real debt burden for consumers that is significantly higher than officially reported figures.

He added that there have been cases where banks have issued loans in violation of the debt load limit because they lacked full information about their clients’ existing installment agreements.

“In this regard, the Central Bank has proposed drafting regulatory acts aimed at governing the installment market,” Ishmetov said, emphasizing that the initiative is not meant to restrict market players, but to align the system with modern financial standards.

As one of its key recommendations, the Central Bank is proposing that all BNPL market participants be required by law to report installment agreements to credit bureaus. This would help create a more accurate and comprehensive view of borrowers’ debt obligations and enable better monitoring of household financial stress. The regulator is also advocating for mandatory full disclosure of overpayment amounts in installment contracts.

According to Central Bank data, the BNPL market in Uzbekistan is growing rapidly. Over the past six years, revenue from these services has increased 25-fold, reaching 201.3 billion soums. In 2024 alone, 1.9 million installment agreements were signed.

Retailers of household appliances are the most active market players, accounting for more than one-third of all BNPL transactions, followed by digital device sales at 11%. On average, each customer holds three active installment contracts, with 82,000 individuals having taken out more than ten installment-based purchases.