Tashkent, Uzbekistan (UzDaily.com) -- The financial technology market in Uzbekistan is experiencing dynamic growth. According to a study by KPMG Caucasus and Central Asia, in 2022-2023, the country saw a significant increase in non-cash payments, and by 2027, the volume of cash payments and transfers is expected to double.

As indicated in the study, in 2022, the total share of non-cash payments and transfers amounted to about 58% of Uzbekistan’s GDP, and the cumulative annual growth of the consumer retail lending market in 2020-2023 was 66%.

The turnover of the market for non-cash transactions (payments and money transfers) of banks in 2022 reached US$36.2 billion, payment organizations – US$10.5 billion. By 2027, the total volume of non-cash transactions is projected to range from US$107 billion to US$125 billion.

“Our research showed that digitalization of all areas of activity is one of the priority areas in the development of Uzbekistan until 2030. Over the past few years, the financial services and technology segment has been actively developing in the country, attracting the attention of both domestic and foreign investors. We are observing a trend of market consolidation, which will continue in 2024 due to the entry into force of updated requirements for payment organizations.

Overall, we expect non-cash transaction volumes to grow by 22%, driven largely by compound annual growth in remittances. More dynamic growth in turnover is predicted in the POS financing market (Point-of-sale financing - financing of goods and services at points of sale) and installment plans, where a 4-fold increase in the volume of financed transactions is expected by 2027,” notes Farrukh Abdullakhanov, partner at KPMG Caucasus and Central Asia.
 
As part of the analysis of the POS financing and installment financing market, key players estimated the market size by turnover (GMV) in the range of US$450 million up to US$500 million. According to the results of the study, the total volume of the POS financing and BNPL (Buy Now, Pay Later) market by 2027 is projected to range from US$1.5 billion – US$2 billion in turnover, and the annual cumulative growth will be 38% - 42%.

“In the POS financing and installment plan market, more aggressive growth is expected in the online e-commerce segment, although historically installment payment is more popular and developed in the offline segment. We see that with the growth of e-commerce, consumers show more confidence in online installment services. In turn, market participants use their own scoring models based on machine learning, which make it possible to reduce the decision-making process on providing financing to 1 minute based on electronic data of the population available on government portals,” comments Vitaly Yakovlev, partner at KPMG Caucasus and Central Asia. .

According to a study by KPMG Caucasus and Central Asia, over the past few years, investor interest in the financial technology market in Uzbekistan has also noticeably increased.