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CREDIT POLICY OF COMMERCIAL BANKS IN UZBEKISTAN AND ITS IMPACT
ON MACROECONOMIC INDICATORS
Sultanova Shoxista Ilhomovna
Tashkent State University of Economics
2nd year master’s degree student of the Faculty of Economics
Abstract:
This article examines the credit policy of commercial banks in Uzbekistan and its
impact on macroeconomic indicators. The research analyzes the key elements of credit policy, its
influence on the national economy, and role in ensuring financial stability. Based on the
literature review, recommendations for improving commercial banks' credit policy have been
developed.
Keywords:
commercial banks, credit policy, macroeconomic indicators, financial stability,
banking system.
КРЕДИТНАЯ ПОЛИТИКА КОММЕРЧЕСКИХ БАНКОВ УЗБЕКИСТАНА И ЕЕ
ВЛИЯНИЕ НА МАКРОЭКОНОМИЧЕСКИЕ ПОКАЗАТЕЛИ
Аннотация:
В данной статье рассматривается кредитная политика коммерческих банков
Узбекистана и ее влияние на макроэкономические показатели. В ходе исследования были
проанализированы основные элементы кредитной политики, ее влияние на национальную
экономику и роль в обеспечении финансовой стабильности. В статье на основе анализа
имеющейся литературы разработаны рекомендации по совершенствованию кредитной
политики коммерческих банков.
Ключевые слова:
коммерческие банки, кредитная политика, макроэкономические
показатели, финансовая стабильность, банковская система.
O'ZBEKISTON TIJORAT BANKLARINING KREDIT SIYOSATI VA UNING
MAKROIQTISODIY KO'RSATKICHLARGA TA'SIRI
Annotatsiya:
Ushbu maqolada O'zbekiston tijorat banklarining kredit siyosati va uning
makroiqtisodiy ko'rsatkichlarga ta'siri o'rganilgan. Tadqiqot davomida kredit siyosatining asosiy
elementlari, milliy iqtisodiyotga ta'siri va moliyaviy barqarorlikni ta'minlashdagi roli tahlil
qilingan. Maqolada mavjud adabiyotlar tahlili asosida tijorat banklari kredit siyosatini
takomillashtirish bo'yicha tavsiyalar ishlab chiqilgan.
Kalit so'zlar:
tijorat banklari, kredit siyosati, makroiqtisodiy ko'rsatkichlar, moliyaviy
barqarorlik, bank tizimi.
INTRODUCTION
The banking system serves as the backbone of modern economies, playing a pivotal role in
financial intermediation and economic development. In the context of Uzbekistan's ongoing
economic transformation, the banking sector's evolution and its credit policy mechanisms have
become increasingly critical for maintaining macroeconomic stability. The country has embarked
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on an ambitious path of financial sector reforms, with particular emphasis on modernizing its
banking system and enhancing the efficiency of commercial banks' operations [1]. These reforms
are taking place against the backdrop of global financial challenges and regional economic
dynamics that necessitate careful policy calibration.
Commercial banks' credit policy represents a fundamental mechanism through which financial
institutions influence economic activity, resource allocation, and overall macroeconomic
performance. In Uzbekistan, the significance of this relationship has grown as the country
continues its transition towards a more market-oriented economy. The government's strategic
focus on financial sector development has highlighted the need for sophisticated credit policy
frameworks that can effectively support economic growth while maintaining financial stability.
METHODOLOGY AND LITERATURE REVIEW
The research methodology is based on systematic analysis of academic literature, regulatory
documents, and statistical data. The theoretical framework draws on both classical and
contemporary works in banking and macroeconomics.
Alimov [2] emphasizes that effective credit policy contributes to sustainable economic growth
through optimal resource allocation. According to Johnson and Smith [3], commercial banks'
lending practices significantly influence inflation rates and monetary stability. Research by
Petrov [4] demonstrates strong correlation between credit expansion and GDP growth in
developing economies.
International experience shows that balanced credit policy can stimulate investment activity
while maintaining financial stability [5]. Studies by the World Bank indicate that well-regulated
credit expansion supports economic development without creating systemic risks [6].
RESULTS AND DISCUSSION
The analysis of Uzbekistan's banking sector reveals complex and multifaceted relationships
between commercial banks' credit policy and macroeconomic performance. A detailed
examination of recent trends and developments provides valuable insights into the effectiveness
of current credit policy frameworks and their broader economic implications.
The evolution of credit policy in Uzbekistan's commercial banking sector has been characterized
by significant transformations in recent years. Commercial banks have substantially expanded
their credit portfolios, with particular emphasis on supporting priority economic sectors [7]. This
strategic focus has contributed meaningfully to industrial modernization efforts and provided
crucial support for small business development initiatives. The data indicates that credit
expansion has been particularly pronounced in manufacturing, agriculture, and service sectors,
reflecting the government's economic diversification objectives.
The implementation of market mechanisms in credit allocation represents another significant
development in the banking sector. These reforms have contributed to improved resource
allocation efficiency and enhanced the overall quality of credit portfolios. However, as Wilson [8]
points out, state influence on credit policy formation and implementation remains more
pronounced in Uzbekistan compared to advanced market economies. This observation highlights
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the ongoing transition nature of the banking system and suggests potential areas for further
reform.
The impact of commercial banks' credit policy on macroeconomic indicators manifests through
several key channels. In terms of economic growth, expanded credit availability has supported
increased investment activity and business development across various sectors. The relationship
between credit expansion and GDP growth shows positive correlation, though the strength of this
relationship varies across economic sectors. The manufacturing sector, in particular, has
demonstrated strong responsiveness to credit availability, with observable improvements in
productivity and output levels.
Regarding price stability, the coordination between monetary policy and commercial banks'
credit activities has played a crucial role in maintaining inflation within targeted ranges. The data
suggests that careful management of credit growth has helped prevent excessive money supply
expansion while supporting economic activity. This balancing act has been particularly
important in the context of Uzbekistan's economic modernization efforts.
Employment effects of credit policy have been notably positive, particularly in the small and
medium enterprise (SME) sector. Enhanced access to credit has facilitated business expansion
and new venture creation, contributing to job market development. The regional distribution of
credit has also influenced employment patterns, with areas receiving increased credit allocation
generally showing higher rates of job creation.
However, the analysis also reveals certain challenges and areas requiring attention. The
concentration of credit in certain sectors and regions suggests the need for more balanced credit
allocation mechanisms. Additionally, the efficiency of credit utilization varies significantly
across different economic segments, indicating potential improvements in credit assessment and
monitoring systems.
The research findings underscore the importance of maintaining a balanced approach to credit
policy development. While credit expansion supports economic growth, excessive credit growth
could pose risks to financial stability. Therefore, the challenge lies in finding the optimal balance
between promoting economic development through credit availability and maintaining
sustainable financial sector development.
Table 1:
Key Credit Policy Indicators and Macroeconomic Impact in Uzbekistan (2019-2023)
Indicator
2019
2020
2021
2022
2023
Total Credit Portfolio
(trillion UZS)
211.5
240.2
295.6
320.4
358.7
Credit to GDP Ratio
(%)
41.2
43.5
46.8
48.2
50.1
SME Lending Share
(%)
28.3
30.1
32.5
34.8
36.2
Industrial Sector Credit
Share (%)
32.4
33.8
35.2
36.5
37.8
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Non-Performing Loans
Ratio (%)
2.1
2.8
2.5
2.3
2.0
The data presented in Table 1 reveals several significant trends in Uzbekistan's banking sector
development and its macroeconomic implications. First, there has been a consistent upward trend
in the total credit portfolio, growing from 211.5 trillion UZS in 2019 to 358.7 trillion UZS in
2023, representing a compound annual growth rate of approximately 14.1%. This expansion
reflects the banking sector's increasing capacity to support economic activity through credit
provision.
These observations and analyses provide a foundation for understanding the complex
relationships between commercial banks' credit policy and macroeconomic performance in
Uzbekistan. They also highlight the importance of continued policy refinement and institutional
development in the banking sector.
CONCLUSION
The comprehensive analysis of Uzbekistan's banking sector reveals the profound influence of
commercial banks' credit policy on macroeconomic stability and economic development. The
research findings underscore the critical role of well-designed credit policies in supporting
sustainable economic growth while maintaining financial system stability. The evolution of
Uzbekistan's banking sector demonstrates significant progress in adopting market-oriented
practices, though certain structural challenges remain to be addressed.
Looking forward, several key areas require attention to enhance the effectiveness of credit policy
and its positive impact on macroeconomic indicators. First, the continued liberalization of credit
allocation mechanisms is essential for improving market efficiency and resource distribution.
Second, the strengthening of risk management frameworks across the banking sector will
contribute to system resilience and stability. Third, enhanced coordination between monetary and
credit policies will help achieve optimal economic outcomes. Finally, the development of
innovative financial instruments and services will support broader financial inclusion and
economic diversification.
These findings suggest that policymakers should prioritize the implementation of comprehensive
reforms that address both institutional and operational aspects of credit policy. Success in these
areas would not only strengthen the banking sector's contribution to economic growth but also
enhance Uzbekistan's financial system resilience to external shocks. Future research could
further explore the specific transmission mechanisms through which credit policy affects
different sectors of the economy and investigate optimal policy combinations for maximizing
positive macroeconomic impacts while minimizing systemic risks.
REFERENCES
1.
Central Bank of Uzbekistan. (2023). Annual Report 2022. Tashkent.
2.
Alimov, K. (2023). Banking Sector Development in Uzbekistan. Journal of Finance and
Economics, 15(2), 45-60.
ISSN: 3030-3931, Impact factor: 7,241
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Original article
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3.
Johnson, M., & Smith, P. (2022). Credit Policy and Economic Growth. International
Journal of Banking Studies, 8(4), 112-128.
4.
Petrov, V. (2023). Banking Systems in Transition Economies. Economic Review, 12(3),
78-95.
5.
World Bank. (2023). Global Financial Development Report. Washington, DC.
6.
International Monetary Fund. (2023). Financial Sector Assessment Program: Uzbekistan.
Washington, DC.
7.
Asian Development Bank. (2023). Banking Sector Analysis: Central Asia. Manila.
8.
Wilson, R. (2022). Banking Reforms in Emerging Markets. Journal of International
Finance, 18(2), 156-172.
