Uzbekistan is Central Asia’s ‘hidden gem’
Oliver Hughes, Head of International Business at TBC Bank Group, was interviewed by Finovate Global. In the interview, he talks about business development in Uzbekistan and the reasons for TBC’s entry into the country’s market. Here below is the summary.
Why Uzbekistan
According to Hughes, Uzbekistan is Central Asia’s ‘hidden gem’. Recently, the country has been attracting increasing attention from international investors. There are several reasons for this. Firstly, a significant part of the population is young, with 59% of Uzbekistan’s 37 million inhabitants under 30. Secondly, the government is implementing various economic reforms and opening the market. Thirdly, the adoption of digital banking services still needs to grow. All these factors contribute to a high demand for online banking services.
The speaker was impressed by Uzbekistan’s macroeconomic indicators. The country has maintained an average annual GDP growth of 6% over the last ten years. This figure is expected to double between 2023 and 2030, reaching $160 billion.
Hughes also observed the human resource potential of the republic, which is not only due to a large number of young people but also a strong education system and an influx of foreign specialists.
TBC began operating in Uzbekistan in 2019. It took two years to form a team, obtain a banking license, and become profitable. TBC, Fidelity, JPMorgan Asset Management and BlackRock funds have invested in the country’s economy. The company’s shares are traded on the London Stock Exchange.
Uzbekistan’s financial ecosystem
According to TBC, approximately 70% of Uzbekistan’s financial sector is dominated by large state-owned banks. However, competition in this sector is increasing as the country enacts privatisation policies.
In June 2023, the Hungarian financial organisation OTP acquired the local Ipoteka Bank. Kaspi announced plans to participate in the privatisation of Humo, the second-largest payment system in Uzbekistan.
A fintech ecosystem is evolving in the country, bringing together startups, state banks and international and local companies. According to Hughes, innovation is being driven by open banking, which enables customers to engage with multiple financial institutions. Thanks to the introduction of this service, TBC Group was able to acquire the P2P Payme application.
Development plans
The speaker mentioned numerous opportunities for development in Uzbekistan. Hughes sees potential in consumer lending, insurance, brokerage services, debit cards, and services for small and medium-sized businesses.
The demand for financial services is significant. Between 2020 and 2023, the volume of digital payments at the point of sale (POS) tripled, exceeding $22 billion. The number of POS terminals and bank cards doubled, with over 45 million such payment means in circulation.
Despite such a significant increase in interest in banking services, the choice of financial products in Uzbekistan remains limited. Retail lending needs to be developed more. Its share is only 12% of GDP.
In the future, TBC plans to expand its loan portfolio, develop new product lines, and improve financial accessibility. Additionally, Hughes has expressed interest in launching a multi-functional debit card.
TBC Uzbekistan is projected to achieve a net profit of $75 million by 2025.
AI perspectives and advances
TBC considers artificial intelligence (AI) as a key component of its strategy to enhance customer service. According to Hughes, the company is currently working on developing an AI assistant and interactive voice control in Uzbek and plans to do so in Tajik and Karakalpak languages.
TBC is currently exploring the possibility of expanding into new markets. However, Hughes emphasised that the primary focus is on Uzbekistan. The head of international business is confident that there are numerous opportunities for growth in the country, and the company is determined to capitalise on them.
TBC Uzbekistan comprises the payment application Payme and the installment payment service Payme Nasiya. This structure is part of TBC Bank Group PLC.
Kursiv Uzbekistan also reports which Uzbek banks have the best mobile applications.
