Cashless Payment Adoption Remains Low Among Uzbek Small Businesses

Uzbekistan's small and medium-sized enterprises (SMEs) are lagging in the adoption of cashless payment systems, as revealed by the Central Bank of Uzbekistan's pilot financial inclusion index. The index assigned a mere 19 out of 100 points for payment service availability within this business segment, marking it as the lowest score among all categories assessed in the report.

In contrast, SMEs demonstrated significantly higher access to other financial services, with credit product availability scoring 50 points and savings product availability reaching 44 points. The substantial 31-point disparity between credit accessibility and payment services highlights a critical gap, indicating that even businesses with bank accounts or credit histories often lack convenient options for accepting cashless payments or managing their cash flow remotely, according to the regulator. The low overall score was further exacerbated by a limited number of registered electronic wallets per business.

The Central Bank underscored the crucial role of digital payment acceptance in connecting daily commercial activities with credit opportunities. Cashless transactions provide a verifiable history of revenue and expenditure, which in turn allows financial institutions to more accurately assess credit risk.

Conversely, a limited volume of cashless transactions restricts the real-time financial data available to lenders. This forces financial institutions to depend more on collateral and existing credit histories when evaluating a business's creditworthiness.

To address these challenges, the regulator has prioritized several initiatives. These include developing a unified digital financial pathway for businesses, which would integrate accounts, corporate cards, payment acceptance, turnover tracking, and financing into a single service. Additionally, the Central Bank aims to expand embedded finance solutions directly within daily business operations.