- Çağatay Baydar, Chairman of FCI, spoke with Abrorkhuja Turdaliev, Deputy Chairman and Member of the Board at the Central Bank of Uzbekistan, at the ‘Exploring Receivables and Payable Finance conference,’ hosted by FCI, IFC, and the Central Bank of the Republic of Uzbekistan.
- They discussed Uzbekistan’s financial system and its future.
Having implemented significant reforms in recent years, Uzbekistan is stepping confidently into a future defined by financial inclusion and technological progress.
Development and digitalisation of Uzbekistan’s banking system
Uzbekistan’s 2020-2025 strategy for developing its banking sector has been progressing strongly. The total number of banks operating in the country has reached 35, ten of which are actively engaged with digital banking systems and activities. Private banks’ share of the country’s total assets has also increased sharply over the course of the strategy, growing from 18% at the outset to 38% today.
By encouraging the ability to make deposits or obtain loans online, the country has been able to substantially increase deposit and loan volumes within its borders. This is not exclusive to personal banking customers; increasingly, small and large businesses are able to solve their financial problems by accessing banking services through digital means.
The success thus far has only encouraged the country to continue its push towards a digital banking transformation.
Turdaliev said, “Our next goals, for the upcoming years, will be to mainstream the banking services, and among others, to make the factoring services more widely available to all small and micro-business representatives and to increase the scope of such services.”
Factoring
As it stands today, small and micro-sized businesses simply do not have enough collateral to access the loans they need to grow their businesses. Factoring, particularly factoring built on efficient digital systems, is one financing mechanism that can help surpass this barrier.
Since factoring provides financing on the basis of an invoice, it can often be used by businesses that may not have the requisite history or collateral to access other forms of financing. Digitalised factoring has the added advantage of being able to process requests much faster and with much less paperwork cost, which can open it up as an option for even the smallest of businesses.
Turdaliev said, “And according to our expectations, as of next year, the number of entrepreneurs fully utilising the factoring services will increase.”
The government’s vision is clear: to foster a financial system where entrepreneurs can access the tools necessary for success. Uzbekistan is positioning itself as a hub of financial innovation in the region by bridging the gap between ambition and resources.
With each reform and innovation, the nation is crafting a future in which businesses of all sizes have the opportunity to thrive.
