At a July 17 meeting held at the Chamber of Commerce and Industry, Mansur Niyazmukhamedov, Chairman of the Uzbekistan Developers Association, expressed concern over the potential consequences of introducing an escrow system without simultaneous access to cheap financing for developers.
He warned that such a system could stall construction projects, drive up the cost of housing, and disrupt state housing programs.
“We are concerned because, according to the government program approved by the President, we are expected to deliver 135,000 apartments this year. But if the escrow system is only launched in 2026, developers may face a shortage of working capital. This would directly affect the cost of housing,” Niyazmukhamedov stated.
Demand pressures and limited supply could trigger housing price hikes
The association proposed allowing developers to access client funds held in escrow accounts at zero or low interest rates.
“If this issue can be raised to the leadership level, client funds could be issued to developers interest-free. Currently, commercial banks act as oversight bodies – the money is held in escrow accounts, and then project financing is opened. But the interest rate is still unknown. Developers are worried: will it be 7% or 10%?” said Niyazmukhamedov.
Regional developers face greater risk due to liquidity issues
The association also raised concerns about developers in Uzbekistan’s regions, where banks may reject financing due to low liquidity and lack of sufficient collateral.
“While Tashkent’s market is developing more systematically, construction is also active in the regions. But due to liquidity issues, banks may refuse to provide project financing or working capital. A bank’s credit committee might conclude that a company building in the provinces lacks the collateral or potential,” he explained.
According to Niyazmukhamedov, this could lead to construction stoppages, job losses, and failure to fulfill government housing programs.
“Some developers are already saying: ‘We can’t get a loan, so we’ll build with our own money – and if that doesn’t work, we’ll stop construction,’” he added.
