Following the collapse of the Union of Soviet Socialist Republics (USSR) in 1991, many countries that were formally a part of the empire declared independence. In this article, we look at four prime examples: Kyrgyzstan, Uzbekistan, Turkmenistan, and Tajikistan, and we examine how fintech is impacting their economic landscapes.
Despite each country having its own unique qualities, there are some similar behaviours shared across them too from an economic point of view. All four have historically been very cash-reliant, with access to traditional financial services being restricted. Furthermore, none have excelled when it comes to mobile and internet adoption and accessibility. In fact, all their economies would be considered low-middle income based on gross domestic product (GDP), excluding Turkmenistan.
Nonetheless, the advent of fintech could prove fruitful for all four countries. Here is a breakdown of how:
Kyrgyzstan
- Population: +7,200,000
- Capital, financial hub and largest city: Bishkek
- Gross domestic product (GDP) per capita: $1,922
- Access to a formal financial account (adults): 45 per cent
- National Bank of the Kyrgyz Republic
The Kyrgyz government has aimed to install greater internet connectivity and IT education in its country for years. This culminated in 2019, when it adopted the Digital Kyrgyzstan 2019-2023 Strategy. In addition to making IT and internet connectivity and education more accessible, the Strategy also looked to improve digital infrastructure and digital literacy as well as promote domestic employment opportunities.
Other goals of the Strategy included developing e-government services and platforms and promoting economic growth via digital transformation of the fintech and banking sectors.
Two years after the launch of the strategy, it also announced that it was going to promote the fintech sector through a new regulatory sandbox.
In October 2024, O!Dengi became the first fintech Kyrgyzstan to launch Visa cards linkable to services such as Google Pay and Garmin Pay.
Lastly, while historically Kyrgyzstan’s internet penetration has been low, in January 2024 it was estimated that just under 80 per cent of the population were now using the internet. (5.41 million internet users)
Tajikistan
- Population: +10,600,000
- Capital, financial hub and largest city: Dushanbe
- Gross domestic product (GDP) per capita: $1,180
- Access to a formal financial account (adults): 39 per cent
- National bank of Tajikistan
Tajikistan launched a National Financial Inclusion Strategy, developed with support from the International Finance Corporation (IFC), to facilitate access to financial services for individuals and small businesses. The strategy, which runs from 2022-2026, is part of a larger effort to create jobs and stimulate economic growth in the country.
In 2022, Tajikistan launched a National Financial Inclusion Strategy to facilitate access to financial services for individuals and small businesses. Developed with support from the International Finance Corporation (IFC), the Strategy will run until 2026 and will look to create jobs and economic growth in the country.
The World Bank and the United Nations Development Programme (UNDP) have also been helping Tajikistan modernise its payment system’s laws while expanding financial inclusion at the same time, according to KPMG. One way it attempted to do so was by employing blockchain in money transfers.
Furthermore, in an attempt to make financial services more accessible, at least one neobank has been created in the country: Alif.
Nonetheless, challenges remain as many still lack the infrastructure for digitalisation, like POS systems. As a result, the country is still heavily reliant on cash.
Turkmenistan
- Population: +7,500,000
- Capital, financial hub and largest city: Ashgabat
- Gross domestic product (GDP) per capita: +$12,500
- Access to a formal financial account (adults): 41 per cent
- Central Bank of Turkmenistan
Turkmenistan entered into an isolation policy after it achieved independence from the USSR. However, according to the BBC, this has only recently started to end. The country differs from its neighbours due to its enormous gas wealth. This is why its GDP per capita is much higher than the other three nations.
In 2023, the Asian Development Bank (ADB) worked closely with the government to advance the preparation of projects in the health, finance, and transport sectors. The ADB also approved a small-scale technical assistance project of $225,000 to advance private sector participation and develop the road map for public-private partnerships in Turkmenistan.
The UNDP has also been working with Turkmenistan on potential digital transformation in the country, with the former saying on its website it “actively supports the realisation of the national priorities in the area of digital development outlined in the ‘Concept for the Development of the Digital Economy in Turkmenistan for 2019-2025’ and the ‘State Program for the Development of the Digital Economy in Turkmenistan for 2021-2025.’”
Uzbekistan
- Population: +36,500,000
- Capital, financial hub and largest city: Tashkent
- Gross domestic product (GDP) per capita: +$3,321
- Access to a formal financial account (adults): 44 per cent
- The Central Bank of the Republic of Uzbekistan
The financial and fintech sectors were largely impacted by the economic reforms that have taken place since 2016 when President Shavkat Mirziyoyev came to power.
The uptake of smartphones and the internet has consequently led to a greater demand for payment solutions. To meet this demand, the government launched its Digital Uzbekistan 2030 Strategy in 2020. According to this decree, “all state mandatory payments in the form of fees and fines are made through the provided online payment services.” It also aimed to provide funding and increase the digital literacy of the population.
The desire for more digital payment methods continued to grow in Uzbekistan. In fact, 97 per cent of the total transactions in 2021 were done digitally. This included:
- online payments (such as e-commerce, bill payments, remittances, etc.).
- mobile payments (such as mobile wallets, QR codes, NFC).
- digital currencies like cryptocurrencies.
Building on this, crypto players were given a licence to operate in the country in 2022.
The fintech ecosystem of Uzbekistan is represented by two payment processing services – Humo and Uzcard. In 2020 there were over 10 payment companies (two owned by telecom companies), more than 28 mobile banking applications and one digital bank. According to KPMG, other notable players include CLICK, Payme and PAYNET.
Finally, this year saw the country roll out its regulatory sandbox.
Compared to the other three countries, Uzbekistan appears to be more advanced with its fintech development with Kyrgyzstan coming close to behind it. Nonetheless, there still remains a huge opportunity for fintech to elevate each of the country’s respective ecosystems for future economic development.
