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Uzbekistan’s Committee for the Development of Competition and Consumer Protection has issued a public warning about hidden costs embedded in microloan contracts, citing a specific agreement in which more than six million soums was withheld from a borrower before the funds ever reached their account.
In the contract reviewed by the committee, the loan was recorded at 19.656 million soums. Only 13.65 million soums was transferred to the borrower’s card; the remaining 6.006 million soums was automatically deducted as an operator fee at the moment of disbursement. Despite receiving the smaller sum, the borrower remained legally obligated to repay the full contractual amount.
The committee did not name the microlender involved, but said the case was drawn from a growing volume of complaints it has received from consumers across the country.
A single missed payment can unwind the entire loan
Beyond upfront fee deductions, the committee flagged a separate risk that borrowers frequently overlook: the legal consequences of missing even one scheduled repayment. Under Article 736 of Uzbekistan’s Civil Code, if a loan is structured in instalments and the borrower fails to make a payment on time, the lender is entitled to demand immediate repayment of the entire remaining balance. The committee said complaints involving such early-repayment demands have increased recently.
The speed and simplicity of mobile-app lending, the committee argued, is part of the problem. Microloans can now be approved and disbursed within minutes through smartphone applications, a convenience that the watchdog said frequently leads consumers to accept financial obligations without reading the terms of their contracts. Its analysis of complaints found that borrowers commonly do not know their rights, are unaware of the precise monthly amounts and due dates they have agreed to, and have not considered in advance what happens if a payment is late.
What borrowers should verify before signing
The committee set out a checklist of questions consumers should resolve before taking out a microloan: the actual amount that will be credited to their account after any fees are deducted; the total sum they will be required to repay over the life of the loan; the size and due dates of each monthly instalment; and whether the lender holds the right to accelerate repayment of the outstanding balance following a missed payment. It also recommended that borrowers honestly assess whether they can meet the repayment schedule before committing.
Consumers who believe a microlender has violated their rights can contact the committee’s hotline on 1159.