ADB: Uzbekistan must turn digital finance into savings

Tashkent, Uzbekistan (UzDaily.uz) —Uzbekistan needs to move from simply expanding access to digital financial services to using them to build savings, manage risks and finance economic opportunities, Adham Khuchkarov, a principal private sector development specialist at the Asian Development Bank, writes.

According to his assessment, digital financial services have already helped millions of people in the country enter the formal financial system. The next task is to ensure that this access contributes to household savings and financial security while supporting the development of small businesses.

Today, people in rural areas can receive remittances on bank cards, pay bills by mobile phone and transfer money without visiting a bank branch. Small businesses, meanwhile, have gained the ability to accept payments using smartphones.

This is particularly important for a country where financial services were previously concentrated mainly in large cities.

Access to digital finance is growing

Uzbekistan has significantly expanded the population’s access to formal financial services. At the beginning of 2025, 59% of adults had a bank account, compared with 44% in 2021. At the same time, 72% reported using digital payments.

The volume of transactions through mobile banking increased by 60% in 2025 to 646 trillion soums, or US$55 billion. The number of QR codes for payments rose to 139,000. At the same time, the share of bank card holders who withdraw cash declined, indicating broader use of digital payments in everyday transactions.

Khuchkarov attributes these changes to investments in instant and contactless payments, integrated payment systems, remote customer identification and mobile services.

Digitalization can also contribute to private sector development. According to the expert, the ability to accept digital payments allows small companies to build transaction histories, reach customers more easily and provide stronger evidence of their need for financing to expand their businesses.

However, Khuchkarov notes that opening a bank account is only the first stage of financial inclusion.

A gap remains between digital payments and savings

Despite the rapid spread of digital transactions, the use of formal financial instruments for saving remains limited.

In 2025, only 7.4% of adults reported saving through a formal financial institution. About half kept their savings in cash at home, while 39% did not save at all.

At the same time, the situation is gradually changing. The share of adults with formal savings increased from 2.6% in 2021, while total savings rose from 20 trillion to 64 trillion soums.

“There remains a significant gap between the widespread use of digital payments and the limited use of formal savings instruments,” Khuchkarov writes.

In his view, financial institutions need to offer products suited to the income and spending patterns of different population groups. These could include low-cost accounts, small and flexible deposits, automated savings tools, and clear information about fees and terms.

For people with irregular incomes, including informal sector workers, farmers and microentrepreneurs, the ability to regularly save small amounts and quickly access them when needed may be particularly important.

Education and employment affect financial inclusion

The research also shows a link between financial inclusion, education levels and economic activity.

Among employed adults, 77% had bank accounts, while the figure was 70% among people with higher education. For unemployed people, the figure was 42%, while it was 50% for those with basic education.

Women were slightly more likely than men to have a formal bank account, at 61.9% compared with 54.5%.

According to the expert, the progress achieved is important, but access to digital services alone does not guarantee that people will be able to fully benefit from further digitalization of the financial sector.

Security becomes part of financial inclusion

The expansion of digital services also creates new risks, including fraud, cyberattacks, misuse of personal data, unclear financial product terms and irresponsible lending.

Therefore, Khuchkarov says, financial literacy should become part of school education, professional training, entrepreneurship support programs and employment initiatives.

People need not only financial products but also the knowledge to compare their terms, use digital services safely, recognize fraud schemes, plan spending and assess their ability to service a loan.

Since 2020, such guidance has been provided by the Central Bank’s Finlit platform. It contains information on budgeting, savings, lending, digital payments, financial security and consumer rights protection. The platform also participates in financial literacy programs through school clubs, university courses, work with the public and information campaigns.

According to the expert, trust in digital financial services remains a key condition for further development. Clear disclosure requirements, accessible complaint mechanisms, effective supervision and responsible lending can both protect consumers and support confidence in the financial system.

Remittances can become a basis for new financial products

Khuchkarov identifies remittances from abroad as another source of expanded financial inclusion.

Among remittance recipients, 77% said they save at least part of the funds they receive. This creates an opportunity for financial institutions to offer them voluntary savings products, insurance, and financing instruments for households and small businesses.

Additional opportunities are provided by digital transaction data. Lenders can use such data to assess a customer’s ability to service debt.

For a small business, a history of digital payments can provide an easier way to verify income. Regular remittances, in turn, can help households build a financial history.

“With appropriate consumer protection mechanisms in place, such data can support lending based less on collateral and more on the customer’s ability to service debt,” the ADB expert notes.

This approach is consistent with broader regional findings. A recent study by the CAREC Institute found that digital financial services can contribute to financial inclusion and inclusive economic growth by reducing transaction costs, expanding access to financial services and increasing participation in the formal economy, including among groups that were previously underserved by financial services.

The next stage of financial reforms

Uzbekistan’s experience, according to Khuchkarov, shows what can be achieved through coordinated development of digital infrastructure, market reforms and public policy.

At the same time, financial inclusion cannot be assessed solely by the number of accounts opened or payments made.

“The first generation of reforms connected more people to the financial system. The next stage should help them use this connection to build savings, protect against economic shocks and create new opportunities,” the expert writes.

The article is based on an assessment of Uzbekistan’s first National Financial Inclusion Strategy conducted by the Central Bank of Uzbekistan with the support of the Asian Development Bank.