Despite progress in financial sector reforms, accessing credit remains expensive due to high interest rate spreads, keeping many small businesses from realizing their full potential.

A new F4D-funded paper, Determinants of Bank Interest Spreads in Tajikistan, explores the factors behind these high borrowing costs and outlines strategies to reduce them. The research highlights key areas for reform, including enhancing bank efficiency, strengthening legal frameworks for loan recovery, increasing competition in the financial sector, and improving financial literacy among borrowers.

Addressing these challenges would not only make borrowing more affordable but also help stimulate entrepreneurship, boost private sector growth, and support broader economic development in Tajikistan.

F4D would like to thank the Swiss State Secretariat for Economic Affairs (SECO) for its generous contribution to support the Tajikistan’s financial sector development through a comprehensive multi-year program.

Read this blog by Pietro Calice for more.