ADB: Uzbekistan Needs to Turn Digital Finance into Savings

ADB: Uzbekistan Needs to Turn Digital Finance into Savings

Uzbekistan needs to take the next step — moving from simply expanding public access to digital financial services to using them for accumulating funds, managing risks, and financing economic opportunities.

According to the expert's assessment, digital financial services have already helped millions of the country's residents enter the formal financial system. Now, the task is to ensure that this access begins to foster savings growth and strengthen household financial security, as well as support the development of small businesses.

Today, rural residents can receive remittances on bank cards, pay bills via mobile phone, and transfer money without visiting a bank branch. Small enterprises, in turn, have gained the ability to accept payments via smartphones.

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

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

The volume of transactions via mobile banking in 2025 grew by 60% and reached 646 trillion soums, or US$55 billion. The number of QR codes for payments increased to 139,000. Concurrently, the share of bank card holders withdrawing cash decreased, indicating a broader use of digital payments in everyday transactions.

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

Digitalization can also be important for private sector development. According to the expert, the ability to accept digital payments helps small companies build a transaction history, find customers more easily, and more convincingly prove the need for financing to expand their business.

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

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

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

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

"There is still a significant gap between the widespread adoption of digital payments and the limited use of formal savings instruments," Khuchkarov writes.

In his view, financial organizations should offer products that match the income and expenditure patterns of different population groups. These could include low-cost accounts, small and flexible deposits, automatic savings tools, as well as clear information on fees and conditions.

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

The study also shows a link between financial inclusion, education level, and economic activity.

Among employed adults, 77% had bank accounts, and among people with higher education, the figure was 70%. For the unemployed, this indicator stood at 42%, and for people with basic education, it was 50%.

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

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

The expansion of digital services simultaneously creates new risks. These include fraud, cyberattacks, misuse of personal data, unclear terms of financial products, and predatory lending.

Therefore, financial literacy, as Khuchkarov notes, must become part of school education, vocational 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 fraudulent schemes, plan expenditures, and assess their ability to service a loan.

Since 2020, such recommendations have been provided by the Central Bank's Finlit platform. It contains information on budgeting, savings, lending, digital payments, financial security, and consumer protection. The platform also participates in financial literacy programs through school clubs, university courses, community outreach, and information campaigns.

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

Khuchkarov identifies remittances from abroad as another source for expanding financial inclusion.

Among remittance recipients, 77% stated that they save at least part of the funds received. This creates an opportunity for financial organizations to offer them voluntary savings products, insurance, as well as financing tools for households and small businesses.

Additional opportunities are opened up by digital transaction data. This data can be used by lenders to assess a client's ability to service debt.

For a small enterprise, a history of digital payments can become 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 facilitate lending based not so much on collateral as on the client's ability to service the debt," the ADB expert notes.

This approach aligns with broader regional findings. A recent study by the CAREC Institute showed that digital financial services can foster 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.

Uzbekistan's experience, in Khuchkarov's view, shows what results can be achieved with the coordinated development of digital infrastructure, market reforms, and government policy.

At the same time, assessing financial inclusion solely by the number of accounts opened or transactions made is insufficient.

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