Thursday, October 20, 2016
Tajikistan's troubled banking sector.
Tajikistan's banking system has been in crisis since 2015, as problems in Russia feed through to this remittance-dependent economy. A decline in funds sent home by labour migrants has shrunk bank deposits, and the proportion of non-performing loans has risen sharply. The cash crisis is exacerbated by poor management and cronyism in financial institutions. The main banks, Tojiksodirotbank and Agroinvestbank, have restricted customer withdrawals.
- International financial institutions will condition assistance on reforms.
- However, the government will balk at any reform measures liable to hurt the rich and powerful.
- The government may seek Chinese support for the banking sector.