Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/190279 
Year of Publication: 
2018
Series/Report no.: 
ADBI Working Paper No. 858
Publisher: 
Asian Development Bank Institute (ADBI), Tokyo
Abstract: 
The level of financial inclusion in Uzbekistan remains low: the majority of households and firms, rather than using formal finance, save and borrow informally, and few use digital finance products. Both indicate the high cost of finance as the top reason for not using it. Secondly, households, which are mostly Muslim, declare that religious reasons prevent them from using formal finance, as only conventional finance is available. Unlike households, firms report that complex application procedures and high collateral requirements are the second and third most important reasons for not using formal finance. Financial inclusion is therefore constrained on the supply side. Policy recommendations include: promoting private and foreign capital participation in all segments of finance; removing/limiting the use of direct interest rate controls and administrative policy tools; and facilitating infrastructure development to promote digital finance. Demand-side policies, like improving financial literacy and customer protection, are necessary to supplement these policies. Strikingly, the country needs to create a financial inclusion and education strategy that will enable better-coordinated actions, leading to sustainable results.
Subjects: 
access to finance
obstacles
liberalization
financial literacy
customer protection
JEL: 
G21
G28
L22
O16
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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