Uzbekistan Warns Borrowers About Hidden Microloan Costs

Tashkent, Uzbekistan (UzDaily.uz) — Uzbekistan’s Committee for the Development of Competition and Consumer Protection has warned microloan borrowers about hidden costs and the risks of early repayment demands following missed payments.

In one microloan agreement reviewed by the committee, the loan amounted to 19.656 million soums. However, only 13.65 million soums was transferred to the borrower’s card, while 6.006 million soums was automatically withheld as an operator fee when the loan was issued.

Despite receiving a smaller amount, the borrower remains obligated to repay the full amount specified in the contract, the committee said.

Microloans can now be obtained through mobile applications in just a few minutes. However, the committee warned that this convenience often leads consumers to take on financial obligations without carefully reviewing the terms of their agreements.

An analysis of complaints received by the committee shows that borrowers frequently fail to read contracts in full, have limited knowledge of their rights and obligations, and do not assess the consequences of late payments in advance. As a result, they face unexpected financial liabilities.

Recently, the committee has received a growing number of complaints involving demands for early repayment of the entire outstanding loan balance following missed payments.

Under Article 736 of Uzbekistan’s Civil Code, if a loan is repaid in instalments and the borrower misses a scheduled payment, the lender has the right to demand early repayment of the remaining balance. This means that even a single missed payment can trigger a demand to repay the entire outstanding debt.

The committee advises consumers to establish how much money they will actually receive and how much they will have to repay in total before taking out a microloan.

Borrowers should also clarify the amounts and due dates of monthly payments and the consequences of late repayment, including whether the lender can demand early repayment of the outstanding balance. The committee recommends assessing in advance whether the loan can be repaid on time.

Consumers who believe their rights have been violated can contact the committee’s hotline at 1159.