A Look into Financial Inclusion in Central Asia

Updated: Oct 7, 2020

In each country, there is still a significant number of people that are still unbanked and underserved. No matter the country’s state, there are barriers to financial inclusion that vary from country to country. However, Central Asia faces this problem more so because of the disruptions and instabilities caused by the breakup of the Soviet Union in 1991. Because of this, the progress of financial inclusion in Central Asia is behind that of other Asian countries. 

Despite this delay in financial inclusion, Central Asia has done some strategies to further financial inclusion in its included countries. Here’s a quick look into the strategies they have already accomplished, and what more needs to be done to improve financial access in the region. 


The government of Kazakhstan has done some moves to encourage the country’s residents to make use of financial products and services, and the “On Payments and Payments Systems” law is one of them. This law regulated the payments system in the country, and more importantly, it defined and added new participants in the payment services market — therefore reaching more people who are unbanked. 

Another law that furthered financial inclusion in the country is one that regulated the issuance of e-money. Before, it could only be issued at commercial banks, but this law extended it to private companies.  This law made it possible to use e-money in transactions and because of this, people are given more of a choice with how they bank. 

For what still needs to be done in Kazakhstan, the unbanked should be financially educated through state programs to increase financial literacy levels. Aside from education, more microfinance institution branches should be opened in areas with a large percentage of people in low-income households. This way, those who need it the most can be easily reached.


One of the financial inclusion strategies accomplished in Turkmenistan is the National Banking Strategy, which envisages the digitization of the banking sector. Once the internet and mobile banking become popularized, financial services will become more available even to those who live in far-flung areas. The National Banking Strategy has also been modernized to better address the constantly changing client expectations as the world advances.

However, there is still a need to reduce inequalities in the country. There is still a gap in education, more so in financial education. Aside from closing the gap in education to reduce inequalities in financial inclusion, financial services should be brought to rural areas in the form of microfinance institutions, agents, and mobile banking. 


Since there is the issue of the gender gap in the country, a gender-specific strategy that aims to raise the level of basic financial education was developed. The central bank of Uzbekistan also started to implement a program on financial literacy that targets owners of small and medium-sized businesses. 

One of the main reasons why residents of Uzbekistan refuse to use formal financial services is their lack of trust in financial institutions, so it’s a good thing that there is a law that regulates consumer protection in the country. This increases the level of trust in banking services. 

Despite these initiatives, Uzbekistan lacks a financial inclusion strategy and there is no ongoing discussion to create one. The government needs to formulate a national financial inclusions strategy to enable a strategic approach to the matter, and financial liberation should continue for easy access to foreign exchange. 


Two of the strategies accomplished that furthers financial inclusion in Kyrgyzstan are the “Forty Steps for 2018-2023” and the “Taza Koom.” Both initiatives aim to introduce digital government and institutions and eventually, to boost non-cash payments in the country. 

The main barrier to financial inclusion in the country is the lack of financial knowledge for both the individual and for business processes. Because of this, there should be a state-level policy with regards to financial inclusion and financial education. Also, real estate is mostly used as collateral in Kyrgyzstan, so this puts women at a disadvantage since men usually own these. To give more opportunities to women, there should also be a state program for the development of women entrepreneurship. 


There has been insufficient transparency of financial institutions in Tajikistan. To help with this issue, the central bank of Tajikistan launched an initiative that would improve customer protection. The central bank has also improved on addressing customer complaints ever since they built the customer compliance department. 

Another strategy accomplished in the country is a banking legislation that stipulates credit organizations to provide affordable financial sources. This addresses one of the barriers to financial inclusion — which is a lack of affordable credit resources. 

For what still needs to be done in Tajikistan, general education is lacking so this should be strengthened for the benefit of the future generation. Young people should be financially educated so they can make use of financial products and services as soon as they need to. Aside from this, technology and branchless banking should be harnessed to expand to rural areas. While not a lot of people are using mobile payment services in the country, the potential use of mobile banking services is high — with residents admitting that they are likely to do so in the future. 


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