The Central Bank of Uzbekistan has introduced new regulations aimed at controlling the debt burden of the population and mitigating financial risks. Banks are now required to strictly account for the ratio between borrowers' income and the amount of credit (DTI indicator).
What is DTI, and who does it apply to?
DTI (Debt-to-Income) is a standard that represents the ratio of a borrower's total debt to their average monthly income. The Central Bank clarified which areas this regulation will apply to:
- Sectors with restrictions imposed: Consumer loans, microcredits, and credit cards.
- Exceptions: Educational loans and funds allocated to individual entrepreneurs are exempt from these requirements.
Maximum limits: How much can you borrow?
The regulatory body has set two types of maximum limits based on how a borrower's income is confirmed:
- For those with officially verified income: The total loan amount should not exceed eight times the average monthly salary.
- Based on alternative data (informal income): If income is calculated using indirect data, the loan amount can be up to five times the monthly income.
Objective: Protect citizens from falling into debt traps
The document outlining these new regulations was officially registered on December 18. Experts state that the main goal is to prevent citizens from taking on excessive debt beyond their capacity and to curb the credit risks of commercial banks.
This reform is considered an important step towards ensuring the stability of the country's financial system and enhancing financial literacy among the population.
Do you think such restrictions on borrowing will help families better manage their budgets?
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