BAKU, Azerbaijan, September 9. Lending by
Turkmenistan’s credit institutions continued to expand in 2026,
with loans accounting for more than 81% of the banking system’s
total assets by August 1.
The shift reflects a broader reallocation of bank resources
toward credit rather than an expansion of the banking system
itself. According to consolidated data published by the Central
Bank of Turkmenistan, loans provided by credit institutions to
other credit institutions, enterprises, organizations and
individuals amounted to 136.2 billion Turkmen manats ($38.9
billion) as of August 1, 2026. Trend‘s calculations based on the data show the figure
increased by 2.2% compared with 133.4 billion Turkmen manats ($38.1
billion) at the beginning of 2026, and by 7% compared with 127.4
billion Turkmen manats ($36.4 billion) a year earlier.
Over the same period, total assets of the country’s credit
institutions stood at 167.4 billion Turkmen manats ($47.8 billion),
essentially flat since January 1 but 5.1% higher than a year
earlier. As a result, the share of lending in consolidated assets
rose to 81.4% by August 1, compared with 79.4% at the beginning of
the year and 80% a year earlier.
Trend‘s analysis
indicates that this rising share reflects a continued shift toward
credit allocation as the main use of bank resources, rather than a
broad expansion of the banking system’s balance sheet. Total assets
declined slightly from the beginning of 2026, while outstanding
loans increased, pushing their share of assets higher – meaning
lending is absorbing a growing proportion of available banking
resources rather than being fueled by fresh balance-sheet
growth.
The remaining components of the asset structure moved modestly:
correspondent and reserve accounts with the Central Bank stood at
16.1 billion Turkmen manats ($4.6 billion), down from 19.4 billion
Turkmen manats ($5.6 billion) at the start of the year; cash and
cash equivalents were roughly stable at 741.5 million Turkmen
manats ($211.9 million); fixed assets and investments totaled 1.6
billion manats ($464.9 million); and other assets stood at 11.7
billion Turkmen manats ($3.3 billion) – all broadly consistent with
prior periods.
The development is consistent with Turkmenistan’s broader policy
of using the banking system to support economic activity and
priority sectors. The World Bank has earlier noted that
state-directed lending remains a major feature of the country’s
financial sector, particularly for import substitution, export
promotion and other priority areas. At the same time, the IMF has
argued that directed lending has weakened monetary-policy
transmission and distorted credit allocation, calling for a gradual
move toward more market-based lending.
The composition of lending will therefore be more important than
its headline growth rate. Recent data indicate that credit to the
private sector has also been expanding: outstanding loans to
private businesses reached 20.2 billion Turkmen manats ($5.8
billion) by February 2026, up 36.4% year-on-year – still a modest
fraction of the 136.2 billion Turkmen manats ($38.9 billion) in
total lending, but one of the faster-growing segments of the credit
book. This suggests that at least part of the increase in lending
is reaching private economic activity rather than being driven
solely by state institutions.
Overall, the latest figures point to a banking system that is
becoming increasingly credit-oriented. If the growing loan share is
accompanied by a sustained increase in financing for private
companies, productive investment and non-hydrocarbon sectors, it
could support Turkmenistan’s economic diversification. The
longer-term significance of the trend will therefore depend less on
the 81% figure itself than on where the expanding volume of credit
is ultimately directed.
