Tajikistan: Banks Struggle to Repay Government-Backed Cotton Loans

Tajik banks have returned just 32 percent of the state-backed cotton loans they funneled to farmers last year. Three banks have already applied for repayment extensions from the Ministry of Finance, citing farmers' inability to service their debts as the reason the bank cannot repay the government.

The official deadline for repayment is April 1. So far, the Ministry of Finance has received just over $12 million of the $36.5 million it lent to banks, which, in turn, financed loans to cotton farmers in 2008. The chief of the Department of Budget Finance, Narzullo Habibulloev, told the Asia-Plus news agency on March 30 that Agroinvestbank, Amonatbank, Tajik Sodirot Bank and Tajprombank had made some returns without specifying the amount each bank had repaid.

The report added that these banks are currently unable to make any further repayments and are seeking to reschedule additional payments. Analysts have cautioned that, given a poor harvest and the falling price cotton on the world market, the government may be able to recover only about 60 percent of its initial outlay.