02 February 2023

Only 3% of adult Uzbeks have bank deposits – WB

For 2021, only 3% of the adult population of Uzbekistan kept their savings in local banks, Spot reports citing the World Bank.

According to this indicator, the republic is in second place from the end in the region of Europe and Central Asia, ahead of Tajikistan from 1%. This reflects the low public confidence in the banking system — a similar situation is observed in many other developing countries.

Instead, people prefer to invest in livestock, foreign exchange, and cars whose value is not reduced by scarcity in the monopoly market.

WB experts note that the banking sector of Uzbekistan has historically been dominated by state financial institutions. They served mainly state-owned enterprises in priority sectors at rates that were below market rates.

However, the situation is changing against the background of the restructuring of the sector, which began in 2017. Expanding access to financial services through the use of savings is critical to expanding people’s access to economic opportunities, enhancing human capital, and resilience to shocks.

For example, over the past five years, the number of ATMs has grown over 20 times – from 445 units in 2017 to more than 11 thousand last year.

Compared to 2017, the number of payment terminals doubled to 430,000 units. The total amount of funds passed through the terminals exceeded 120 trillion soums or $10.6 billion (13% of GDP).

The COVID-19 pandemic has given a powerful impetus to the development of contactless payment methods. For example, about 100,000 entrepreneurs have received QR codes, and another 2,000 use NFC.

Over ten years, the share of adult Uzbeks with bank cards has almost doubled – from 23% to 44% in 2021. The number of cards in circulation grew by almost 60%, from 19 million in 2017 to 30 million by July 2022.

In addition, the number of people using remote banking services has increased six times – up to 25 million people.