Uzbekistan: A Fintech Paradise?

By Nikolay Seleznev, Chief Strategy and Business Development Officer at Uzum

The descendants of those who traded on the Silk Road are now embracing a new vehicle for commerce: fintech. For years unable to access innovative finance and technology products, Uzbeks are making up for lost time. In a country and a region which is enjoying robust growth and undertaking a program of economic modernisation, the market for Uzum – and other digital service ecosystems – is growing at an exponential rate.

Macroeconomic Growth and Transformation

Uzum - Uzbekistan, a Fintech Paradise

Clearly, Uzbekistan’s macroeconomic tailwinds must be part of any explanation of this phenomenon. Forecasted GDP growth of more than 45% from 2021 to 2026, supported by a 15% growth in the country’s population, as well as predicted growth in monthly salaries of 44% by 2026 – not to mention the 42% growth forecast in the number of smartphone users – are all metrics which promise unparalleled opportunities for businesses catering to e-commerce, payments and enterprise growth.

Of course, a rising tide of prosperity, consumerism and entrepreneurship will spur fintech growth. But specific trends in Uzbekistan’s financial landscape are our real source of optimism. Crucially, financial inclusion and a payments revolution are the accelerants in this market.

Uzbekistan’s high proportion of unbanked and underbanked citizens creates an opportunity for really radical, rapid growth in fintech. According to our analysis, it will grow by 5-7 in a mid-term perspective.

But more than a shift towards banking, the way in which Uzbeks conduct commerce is evolving. P2P payments, digital payments, and QR code use are growing rapidly due to better internet coverage and increasing smartphone penetration. Smartphone penetration is likely to reach 77% next year, encouraging a shift from cash and legacy transaction models. This projected explosion in digital payments translates into predictions that the country’s annual digital payments total, which sat at $46,7 billion in 2022, will reach or even surpass $98,4 billion by 2026.

Innovation and A Thriving Startup Scene

Uzum - Uzbekistan, a Fintech Paradise

Uzum was a pioneer in this arena, but we are by no means alone. A thriving start-up scene has emerged in Tashkent, encouraging a new culture of tech-focused entrepreneurship. This dynamic environment is evident throughout the city. From high-schools and universities to the shared working spaces and IT labs popping up across the country.

This isn’t just an impression, either. A crucial facet of Uzum’s digital ecosystem (which includes a marketplace, an express delivery service, traditional and digital banks, a BNPL service, an automotive marketplace) is an app for entrepreneurs, designed to provide the financing for young, early-stage businesses. The uptake this SME element in our wider offering has enjoyed tells a story which bodes very well for Uzbekistan. This is a country increasingly characterised by the innovativeness and commercial ambition of its young population.

The dynamism of Uzbekistan’s people is irrepressible. And as the economy is transformed – both bottom-up and top-down – Uzbeks are proving themselves to be enthusiastic digital consumers and daring, imaginative entrepreneurs. Businesses which cater to these energies, and which facilitate the start-up success and consumer culture emerging in the country, can expect to enjoy uncapped rewards.