TASHKENT

Uzbekistan’s Finance Ministry will attract its resources to allow the country’s Mortgage Refinancing Company (UzMRC) to continue its activity amid property boom and high demand for mortgage loans by the population.

UzMRC was founded by the ministry in 2020 to provide the population with affordable and long-term mortgage loans. This non-bank financial company was tasked to provide long-term financial resources to commercial banks based on market principles to meet the growing demand of the population for housing.

The company is currently working to attract additional funds from international financial institutions.

UzMRC’s objectives include issuing mortgage-backed securities in the national currency and developing the capital market, assistance in improving the mortgage lending system based on market principles.

The Asian Development Bank (ADB) has provided UzMRC with $150 million to start its refinancing operation. However, at the end of January this year, UzMRC announced the suspension of refinancing mortgage loans in the secondary housing market saying that due to high demand it was running out of resources. It said that the ADB funds would be fully disbursed at the beginning of this year, a year earlier than expected.

However, the Finance Ministry said UzMRCI would resume its operations in the first quarter of 2022, allowing mortgage loans issued by commercial banks in the amount of $42 million to be refinanced.

In 2021, the company provided resources for mortgage loans in the amount of 1.9 trillion soums in the secondary housing market. It is planned to allocate loans in the amount of 2 trillion soums, the ministry said.

UzMRCI plans to issue mortgage bonds in 2023 in a move to diversify the company’s activities.

According to the new procedures, the Finance Ministry has been regularly allocating resources to commercial banks for providing mortgage loans in the primary market. Last year, 5 trillion soums were allocated for this purpose. It is planned to allocate 12.8 trillion soums to commercial banks for issuing mortgage loans in 2023.

According to the central bank data, in 2021 banks in Uzbekistan issued 1.25 trillion soums mortgage loans for the secondary housing market, which is 8.6 times more than in 2020.

Banks in the Central Asian country reported a net profit of 3.87 trillion soums ($362 million) in the first eight months of 2021, 12 percent up from the same period last year.

There are 31 banks in Uzbekistan, 13 of which are state-owned. There are two branches of foreign banks.