Uzbekistan’s only mobile-only bank, TBC Bank Uzbekistanowned by London Stock Exchange-listed TBC Bank Group, has raised $38.2 million in a new equity investment. The company plans to expand its local presence in the country and introduce new financial products.
TBC Banking Group led the latest financing of TBC Bank Uzbekistan by injecting $23 million, while shareholders, the European Bank for Reconstruction and Development (EBRD) and the World Bank’s International Finance Corporation (IFC), participated in the round by investing $7.6 million each.
After serving clients in Georgia, TBC Banking Group decided to expand beyond the borders of that country in 2019 and found its first international market in Uzbekistan. The bank started its operations in Uzbekistan in 2020 through a separate entity, TBC Group Uzbekistan, which launched the bank exclusively mobile after its debut, without physical branches in the country. The plan was to take advantage of Uzbekistan’s growing digitalization efforts and anticipate business growth in the country, which has the largest population after Russia and Ukraine in the region – the second largest among all countries of the Commonwealth of Independent States – and has decent economic and socio-demographic characteristics.
“Before TBC came, there were no banking apps in Uzbekistan… Four years later, most banks have a mobile app, but TBC is way ahead in this area,” said Oliver Hughes, head of TBC Group’s international business, in an exclusive interview.
According to official data, Uzbekistan has a smartphone penetration rate of 70% and an internet penetration rate of 77%; 59% of its population of 37 million is under 30, making it a viable market for a mobile-specific business.
TBC Bank Uzbekistan offers a mobile application through which customers can open bank accounts and access services such as loans and cash deposits. This eliminates the need to physically visit a bank branch to access banking services.
Hughes told TechCrunch that a few years ago, customers in Uzbekistan typically had to go to their bank and wait in line to do their banking.
In addition to mobile banking, TBC Group Uzbekistan owns Payme, the digital payment application for individual users and small businesses, as well as the Sharia-compliant credit business, called Payme Nasiya. To expand its coverage, it seeks to integrate some of the experiences of these two businesses within the bank or synchronize them with the bank’s operations.
For example, through its app, TBC Group Uzbekistan will offer tips, recommendations and user-generated content on local events, entertainment, concerts and travel in order to provide complementary services that are not strictly related to finance. Some of these features will first arrive on the Payme app, but will gradually be available to TBC Bank Uzbekistan customers.
Similarly, Payme Nasiya currently offers point-of-sale and installment loans to Uzbek customers. To expand its credit business, it will introduce e-commerce and offline buy-now-pay-later. This is expected to attract more local businesses and ultimately help the mobile bank gain more customers.
In addition to new financial products in the pipeline, TBC Group Uzbekistan plans to integrate AI experiences into its mobile banking. Hughes told TechCrunch that the group has built a large language model using primarily its customer data set and is working on a voice assistant to provide banking and financial services via a chatbot integrated into its app.
In the fall, TBC Bank Uzbekistan will use the new funding to add credit cards and an insurance product next year, Hughes said.
The bank’s roadmap includes additional services such as current accounts, as well as accounting, offline payments, e-commerce payments and loans specifically aimed at small and medium-sized businesses, Hughes added.
“This investment will allow us to further capitalize on the immense opportunities in Uzbekistan, a rapidly growing country with a population of over 37 million where TBC UZ continues to build on its growth momentum,” said Vakhtang Butskhrikidze, CEO of TBC Bank Group, in a prepared statement.
By the end of 2022, TBC Bank Uzbekistan reached the break-even point, and 2023 was the bank’s first full year of profit. As of March 2024, the bank had 4.8 million registered unique users. It also recorded 1.2 million monthly active users in the first quarter of 2024.
Overall, TBC Group Uzbekistan, with a registered user base of 15 million users, has achieved profitability two years after its launch and recorded 85% year-on-year revenue growth in the first quarter of this year. The company made gross loans of $296 million and deposits of $216 million through its three subsidiaries. Its net profit reached $23 million for the 2023 financial year, the majority of which came from Payme. However, TBC did not disclose the revenue or profit of the mobile bank.
“TBC UZ’s impressive growth trajectory and innovative approach align with our mission to support sustainable economic development in the region,” said Andi Aranitasi, EBRD Country Manager for Uzbekistan.
Hughes said that by the end of 2025, TBC Uzbekistan Group is expected to generate $75 million in net profit, most of which will come from TBC Bank Uzbekistan.
“We are encouraged by the progress made to date by TBC UZ and remain confident in its potential to contribute to economic growth and financial inclusion in Uzbekistan,” said Neil McKain, IFC Country Director for Uzbekistan.
