ADB: Financial Inclusion Regulation Tajikistan Literacy

The Asian Development Bank Institute Working Paper No. 847 (June 2018) by Roman Mogilevskii and Shokhboz Asadov, titled “Financial Inclusion, Regulation, Financial Literacy, and Financial Education in Tajikistan,” provides an analysis of financial inclusion, literacy and education issues in the Republic of Tajikistan. The paper states that Tajikistan has a territorial area of 141,400 km² and a population of 8.7 million (2016), with GDP of US$7.0 billion and GDP per capita of US$796 at the current exchange rate, and that it is one of the most remittance-dependent countries in the world—ranked first in remittances-to-GDP ratio until 2014 and fourth in 2016 after the crisis in the Russian Federation. The report states that remittances from labour migrants to Tajikistan fell from US$3.7 billion in 2013 and US$3.4 billion in 2014 to US$2.3 billion in 2015 and US$1.9 billion in 2016, requiring a major devaluation of the somoni from 4.77 to 7.87 TJS per US dollar. It states that total labour migrants are estimated at around 1 million people, 30–40 percent of the country’s labour force. The paper states the credit system comprises the National Bank of Tajikistan, 16 commercial banks, and 80 microfinance organisations including 34 microcredit deposit organisations, 13 microcredit organisations and 33 microcredit funds. It reports average bank loan interest rates of 30.04 percent in local currency and 20.80 percent in foreign currency, and MFI rates of 38 percent and 28 percent. The report states that substandard banking loans constitute one third of all loans while nonperforming loans account for about 66 percent, and notes that two commercial banks had been declared bankrupt with licenses revoked by the National Bank of Tajikistan.