Financial Crime World

Uzbekistan Sees Progress in Financial Inclusion, but Crime Remains a Concern

Uzbekistan has made significant strides in promoting financial inclusion over the past few years. However, the country still struggles with a culture of informal savings and alternative investment methods that can make it vulnerable to financial crime.

Unconventional Savings Methods Abound

According to a woman from Uzbekistan’s Fergana region, many people in the country opt for unconventional ways to save their money.

“We don’t use banks much because that’s how things work here. We save in other ways: we buy livestock, raise them, and sell them. Or we buy foreign currency - it never goes down in value,” she said.

Lack of Trust in Financial System

The lack of trust in the financial system is a major factor driving this trend. Despite efforts to improve access to formal savings, many Uzbekistanis still prefer to keep their money outside of the banking system.

  • Only 44 percent of adults in Uzbekistan have bank accounts.
  • Retail deposits make up just 10 percent of GDP.

Government Efforts to Improve Financial Inclusion

However, the government has been working to change this landscape with its National Financial Inclusion Strategy for 2021-2023. The strategy aims to:

  • Increase access to basic financial services
  • Promote digital financial services
  • Enhance financial consumer protection

The strategy has already led to an increase in the number of automated teller machines, point-of-sale terminals, and digital banks.

New Law to Boost Non-Bank Credit Organizations Sector

The adoption of a new law “On Nonbank Credit Organizations and Microfinance Activities” is also expected to boost the development of the non-bank credit organizations sector and improve financial inclusion.

Crime Remains a Concern

Despite these efforts, crime remains a concern. The lack of formal savings mechanisms can make it difficult for authorities to track financial transactions and identify illegal activities.

  • “The distribution of financial access points remains uneven, and this can create opportunities for criminal activity,” said an expert.
  • “The government needs to continue its efforts to improve financial inclusion and ensure that people have access to safe and secure ways to save their money.”

Continued Support from World Bank Group

The World Bank Group has pledged continued support for Uzbekistan’s financial inclusion reforms. The focus will be on:

  • Enhancing financial consumer protection
  • Improving the deposit insurance framework
  • Promoting financial literacy - especially among women

Prioritizing Measures to Prevent Financial Crime

As Uzbekistan continues to work towards promoting financial inclusion, it is essential that the government also prioritizes measures to prevent financial crime and protect its citizens from fraudulent activities.