21
Figure 8. Composition of loan portfolio of credit unions.
Source: WOCCU, Seminar’s materials, May, 2005, Tashkent.
Demand for consumer loans remains most stable at a rate of 20
percent of CU loan
portfolios. In 2004 the share of loans to replenish working capital has grown from 26% to
37% due to a significant reduction in agricultural loans. Given the fact that most borrowers
are
individuals, it can be said that most CU loans work for the development of
entrepreneurial activities and consumer purposes.
Although the process of increasing CU capitalization is
not yet comparable with the
capitalization of the banking sector, their rates are impressive: as of early 2005
CU capital
amounted to 950 million soums having grown 250% since 2003. Capital portfolios consist
mainly of charter capital formed with contributions from CU members.
A reduction in the
average individual’s share contribution from 5,000 soums to 2,000 soums allowed CUs to
expand their clientele and increase their charter capital.
Main problems of CU’s development include:
•
Barriers in asset growth. There are several legislative barriers which are hindering
asset growth. These include a ban on all types of activities except
for accepting deposits and
issuing loans. In additional there are caps on real estate investments which permit no more
than 10% of assets. These limitations are burdensome due to
small amounts of assets and
CU capital.
•
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