DUSHANBE, April 1, 2013, Asia-Plus  -- A report by the Eurasian development Bank (EDB) notes that loan dollarization in Tajikistan increased from 56 percent at the end of 2011 to 60 percent at the end of 2012.

As of September 2012, the return of assets (ROA) ratio in Tajikistan was estimated at some 1.56 percent and the share of non-working loans has increased from 15 to 16.4 percent over the first nine months of last year, the EDB researchers say, noting that Tajikistan’s banking system remains weak and vulnerable to shocks.

At the same time, the report notes that last year’s annual bank lending growth in Tajikistan was 13 percent.     

According to the EDB report, the economic growth in Tajikistan stood at 7.5% in 2012, with all sectors showing significant improvement.  However, as EDB researchers point out, the economic development model of the country has been characterized over the past ten years by a significant presence of the consumer sector while private investments remained very low.  With a negative balance of foreign trade, the main source of finance for domestic demand are money transfers.

“The previous economic model of Tajikistan offers limited opportunities for further growth and the country has faced a need to fulfill structural reforms, improve the investment climate and thereby promote domestic investment,” the report says.

Eurasian Development Bank (EDB) is an international financial organization founded by Russia and Kazakhstan in 2006. The members of the Bank are Russia, Kazakhstan, Armenia, Tajikistan and Belarus (2010). Other states or international organizations can become members by joining the Agreement Establishing the EDB. The Bank has authorized capital in exceeds US$1.5 billion, which was formed of contributions by its member states: Russia (US$1billion), Kazakhstan (US$500 million), Armenia (US$100,000), Tajikistan (US$500,000) and Belarus (US$15 million). The authorized capital may be increased by resolution of the Bank’s Council. The Bank has the status of an international organization, and is subject to international law.