Despite significant expansion in access to payment services through embedded finance in Uzbekistan, full financial inclusion has not yet been achieved. As Dilbar Abduganieva, Director of Financial Inclusion at the Central Bank of Uzbekistan, stated at the Silk Road Finance and Technology Forum in Tashkent on August 25, the implementation of these technologies does not fully resolve issues of quality and transparency of financial products.
During the session 'Embedded Finance in Action – The Last Mile, SMEs, and Individuals,' moderated by Hayati Chauhan, Director of Strategy and Head of Staff for the Global Network of Finance and Technology, the question was discussed of whether embedded finance has truly increased the number of users of financial services, or if it has merely improved convenience for those already part of the financial system.
Abduganieva emphasized that financial inclusion encompasses not only access but also usage, as well as the quality of financial services and the availability of a basic set of products covering loans, savings, and payments. Currently, embedded finance primarily ensures access and to some extent usage, while the issue of product quality remains unresolved due to insufficient transparency.
She also noted that formal savings in Uzbekistan remain below regional and global levels, despite the cultural tradition of saving money. The Central Bank Director urged fintech companies to pay more attention to savings products instead of focusing exclusively on lending.
Furthermore, Abduganieva added that providers of embedded financial services usually focus on sectors with higher margins and existing infrastructure, and do not always reach the most vulnerable groups, including women entrepreneurs, people with disabilities, migrants, and residents of remote areas. To solve this problem, she said, incentives and individually tailored requirements from regulators are necessary.
Rasuljan Gulomov, Chairman of the Supervisory Board of Uzum Bank, reported that over 10,000 sellers are registered on the Uzum Market marketplace. The bank uses data on their turnover and sales to issue loans without traditional collateral, which is often unavailable to small and medium-sized enterprises without credit history. Gulomov also presented the Nasia installment service, which allows clients to pay for purchases over a period of three to twelve months.
According to Gulomov, the payment system in Uzbekistan has undergone significant changes in the last five to six years. Clients can now open a bank card without visiting a branch, pay for purchases on marketplaces, and pay utility bills online. These changes have allowed many people previously outside the financial system to enter it.
Kanokpan Lao-Araya, Director of the Asian Development Bank office in Uzbekistan, stated that embedded finance has expanded both the reach and depth of financial services. Existing clients have gained access to a wider range of products, and previously underserved groups have gained access to basic services.
She identified four areas where technology can bring the greatest benefit: connecting people with business opportunities; assessing creditworthiness based on behavioral data instead of collateral; developing products tailored for specific groups, such as women entrepreneurs; and strengthening consumer protection and risk management.
Todd Schweizer, co-founder and CEO of Brankas, provided examples from other countries in the region where embedded finance has expanded access to banking services. In the Philippines, one bank opened 500,000 accounts through an installment and messenger application within six months, and a digital wallet with 70 million users allows clients to open savings accounts through a partnership with four banks.
In the United Arab Emirates, Abu Dhabi Commercial Bank and the food delivery service Talabat issue credit cards directly in the app using open banking data. Schweizer reported that one million applications were received in the first year of the service. He also noted that Uzbekistan is laying the foundations to become a regional fintech hub through the creation of the Tashkent International Financial Centre and the launch of a new regulatory sandbox.