September 18, 2024 – In Tashkent, Uzbekistan, a pivotal meeting was hosted by the USAID Business Support Project and moderated by StrategEast, focusing on advancing FinTech and e-government solutions in Uzbekistan. The event brought together key stakeholders, including representatives from both the public and private sectors, international organizations, and leading financial institutions, to explore ways to foster innovation and drive digital transformation.
The quarterly donor coordination meetings play a vital role in ensuring that strategies for Uzbekistan’s economic and digital development are well-coordinated and aligned. Key participants included representatives from organizations such as the FinTech Association, World Bank, EBRD, Foreign Investors Council, GIZ, EU, StrategEast, CIPE, and the Ministry of Digital Technologies.
Key Discussion Points:
- Developing a Robust FinTech Ecosystem: The meeting began with discussions on how to seamlessly integrate FinTech within the e-government framework to enhance public services and drive private sector growth. Participants emphasized the importance of developing a dynamic, secure, and inclusive digital economy, with special focus on leveraging global best practices from leading technology firms such as Meta and Google.
- Policy Adjustments and Recommendations: The need for regulatory frameworks that support innovation was widely discussed. Key areas of focus included:
- The modernization of laws and regulations governing Buy Now Pay Later (BNPL) services to prevent fraudulent schemes and boost e-commerce.
- Implementing clear regulations for digital financial services, particularly those that support small and medium enterprises (SMEs).
- Calls for policy adjustments to ensure Uzbekistan’s digital economy remains competitive, secure, and inclusive.
- Opportunities for Public-Private Partnerships: The meeting explored opportunities for partnerships between the government and private sector to advance Uzbekistan’s digital infrastructure. Insights were shared on how international collaboration, particularly with leading technology firms and global experts, could help Uzbekistan leverage global best practices.
- Cybersecurity – An Immediate Priority: Cybersecurity was identified as a critical area of concern, especially in the context of FinTech and banking institutions. Key points included:
- The urgent need to build centralized leadership for coordinating cybersecurity strategies.
- Encouraging collaboration between the private sector and government to share information on cyberattacks and strengthen defense protocols.
- An emphasis on creating open communication channels between security divisions in financial institutions to develop unified response strategies.
- Blockchain and AI as Drivers of Future Innovation: The transformative potential of blockchain and AI technologies was a significant theme throughout the discussions. The importance of AI governance to ensure corporate responsibility was highlighted. Additionally, a working group focused on blockchain and cryptocurrency regulation, including the involvement of companies such as Tether and Hemera, is actively exploring how to integrate cyber assets into Uzbekistan’s financial infrastructure.
- Venture Capital and Corporate Banking Challenges: Despite significant growth in the startup ecosystem, participants acknowledged the obstacles to venture capital engagement. Key challenges include:
- Factoring laws and capital risk regulations that hinder startup financing.
- Corporate banking regulations that create barriers for startups seeking venture capital. To address these challenges, participants suggested stronger engagement between the private sector and regulatory bodies to clarify laws and promote venture capital activity.
- Supporting SMEs and Crowdfunding: The need for improved financial instruments for SMEs was highlighted as a key priority for economic development. Proposals included:
- Expanding access to crowdfunding platforms and packaging loans to provide SMEs with the resources they need.
- Regulatory reforms aimed at making it easier for startups and SMEs to receive financial support from both local and international investors.
- Risk Management and Alternative Investments: The meeting concluded with a focus on risk management for alternative investments. Participants emphasized the need for a stronger regulatory framework to mitigate risks related to crowdfunding and other alternative financial instruments, ensuring long-term stability within Uzbekistan’s financial ecosystem.
Next Steps and Continued Collaboration:
- Participants agreed that Uzbekistan’s Foreign Investors Council (FIC) will act as a key platform for the upcoming dialogue in October between the public, donor organizations, and private sectors.
- The next meeting is scheduled for December 2024, where stakeholders will continue discussing strategies to tackle challenges such as venture capital engagement, cybersecurity measures, and FinTech support.
