TBC Bank Uzbekistan Secures $37M Funding for AI-Driven Expansion and Product Innovation

TBC Bank Uzbekistan raises $37m

This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author. Uzbekistan's largest digital bank, TBC UZ, is part of TBC Uzbekistan, which also includes Payme digital payments app and Payme Nasiya instalment credit business. TBC Uzbekistan already has 17 million unique registered users and will leverage this new capital for further development as it continues to scale profitably and diversify its offering. Vakhtang Butskhrikidze, CEO of TBC Group, commented: "This year has been a landmark one for TBC Uzbekistan, marked by significant progress. Our latest equity investment reflects our strong confidence in the massive potential of this high-growth market. With TBC Uzbekistan now contributing 9% of the Group's net profit and 44% of our unsecured consumer loans portfolio, its role within our Group is pivotal and it is set to increase. This new capital will fuel even faster growth and innovation, positioning us to unlock greater value for our customers and investors alike." Nika Kurdiani, CEO of TBC Group operations in Uzbekistan, added: "Reaching a record in equity funding for 2024 is a testament to the transformative progress we've achieved. This investment bolsters our ability to scale at pace, bringing cutting-edge banking solutions to an even broader audience. We're not just growing -- we're redefining what banking can be for millions of customers across Uzbekistan. Our team has achieved remarkable milestones this year and we are excited to continue this momentum into 2025, as we deliver financial services that are simpler, smarter, and more accessible for everyone." Expanding our reach In 2024, TBC Uzbekistan significantly expanded its presence, reaching 17 million unique registered users as of September 2024. This milestone means that over 40% of Uzbekistan's population now engages with the ecosystem services, solidifying TBC Uzbekistan's position as the leading digital banking ecosystem in Central Asia. Diversifying funding base In addition to securing new equity funding, TBC UZ has also secured $105 million in wholesale financing over the course of 2024 as the digital bank continues to diversify its sources of funding. The digital bank's loan portfolio has demonstrated strong growth, increasing by 99% year-on-year in the first nine months of 2024 to reach $460 million. The total wholesale funding for this year includes a $10 million loan from Luxembourg-based Global Gender-Smart Fund (GGSF) via one of its portfolio managers, Triple Jump. It also includes a $40 million loan from FMO, $20 million in credit lines from responsAbility Investments AG, $25 million in debt financing from BlueOrchard, and a $10 million loan from the European Bank for Reconstruction and Development (EBRD). Launching new products With the core business scaling profitably, TBC Uzbekistan has focused this year on expanding its product suite and entering new market segments. Over the course of 2024, TBC has launched a range of exciting new products that are set to drive customer engagement, boost loyalty and add new revenue streams for the business. The newly unveiled Salom debit card is set to become TBC's flagship daily banking product and the main gateway to the entire TBC Uzbekistan ecosystem. This card is a core building block of TBC's strategy to make financial services simpler and more enjoyable for customers. Most recently, TBC has also launched Osmon Card, its first revolving credit product, aimed at providing greater choice and fueling loyalty among the bank's customers. Tapping into an even wider customer base, it also launched TBC Business - the country's first fully digital banking service, catering to the country's small and medium enterprises (SMEs) and individual entrepreneurs. Leveraging innovative tech, bolstering infrastructure In 2024, TBC Uzbekistan achieved remarkable progress in harnessing advanced technology and strengthening its infrastructure to deliver a more enriched banking experience for its customers, while also enhancing its efficiency. A standout achievement was the development of its proprietary speech tech stack and the deployment of AI-powered agents to handle payment reminder calls for customers with loans up to 30 days overdue. In the third quarter of 2024 they handled over 40% of loans in early-stage delinquency, delivering efficiency gains while maintaining a human-like conversational experience that most customers couldn't distinguish from real people. This innovative use of AI has not only enhanced customer interactions but also significantly boosted operational efficiency, with more AI-driven solutions in the pipeline for 2025. TBC Uzbekistan also achieved a key infrastructural milestone this year with the launch of its own in-house processing centre. This new facility streamlines payment operations, accelerates the development of financial products, and shortens time-to-market for new offerings, providing a robust foundation for the bank's digital banking growth. Additionally, TBC Uzbekistan entered into strategic partnerships with Visa and Mastercard, enabling the delivery of an expanded range of services and strengthening its ability to offer innovative and customer-centric financial solutions. These collaborations further boost TBC Uzbekistan's position as the leader in the digital banking ecosystem of Central Asia.

Uzbekistan's mobile bank TBC bags $37M to expand with new AI and insurance products

Uzbekistan's mobile-exclusive bank, TBC Bank Uzbekistan, has raised $37 million in a new funding round to bolster its dominating digital presence in the Central Asian nation by developing new AI and tech products and attracting more tech-savvy customers. The fresh investment, made by the bank's London-based parent TBC Group, comes just five months after it raised $38.5 million in July. The parent company also led the last round, which included participation from its shareholders, the European Bank for Reconstruction and Development (EBRD) and the World Bank's International Finance Corporation (IFC). Uzbekistan has been an attractive market for digital businesses in recent years, with nearly 90% internet penetration and a young population -- 60% of its total population is under 30, per UNICEF. However, a significant share of the country's banking assets remains with its state banks. TBC Group sees this as a growth opportunity. Started in 2020 under TBC Group Uzbekistan, the bank offers a mobile app through which customers can open bank accounts and access banking services, including cash loans and deposits. The Uzbekistan group, which is 60% owned by London's TBC Group and 20% each by IFC and EBRD, recently expanded its financial lineup in the country with its in-house processing center to streamline payment operations and shorten time-to-market for new offerings, and entered strategic partnerships with Visa and Mastercard. Further, it introduced the Salom debit card and Osmon credit card and launched TBC Business, a digital banking service for small and medium Uzbek enterprises. In the last few months, TBC Uzbekistan also started building its proprietary AI solutions, including agents to handle payment reminder calls for customers taking loans. Hughes told TechCrunch that those agents attended 42% of all the reminder calls in the third quarter. Next year, TBC Uzbekistan plans to expand its AI developments by bringing service and sales bots and a dialog-based mobile service to let customers interact with its app using their voice instead of going through a text-based interface. "We're going deeper into the financial life of retail customers across Uzbekistan. So we're building out vertical by vertical into different products," Oliver Hughes, head of international business at TBC Group, said in an exclusive interview. Hughes told TechCrunch that the group hired AI experts who built AI assistant Alice for Russia's Yandex. These experts have built a finance-specific LLM based on Meta's Llama that understands local nuances and local languages, including Uzbek, the executive said. While Hughes did not disclose the exact capital the group is specifically putting into its AI effort, he said that "a material portion of the money raised will be going to the AI projects, but still, the overwhelming majority will be for building and scaling" its business and consumer products. One of them will be insurance. TBC Uzbekistan currently offers insurance through a third-party service provider, but it plans to become an insurer in the country next year. It also plans a buy-now-pay-later solution and an SME lending product. Similarly, the mobile bank will enhance its Salom debit card with new benefits and offerings to attract more customers. Uzbekistan has not yet been a highly competitive market for a banking entity. However, the country's growing digital base and young population have drawn interest from foreign players. Hungry's OTP Bank and South Korea's Korea Development Bank have already set up their shops in the country. Similarly, France's Société Générale, Kazakhstan's Kaspi, and the U.S.'s Citi Bank are exploring to enter the country. "It's not super competitive today, but it will certainly become more and more competitive as we could go along over the next few years," Hughes said. TBC Uzbekistan, which also operates the digital payments app Payme and Sharia-compliant credit business Payme Nasiya, has a user base of 16.9 million users as of September, up from 13.2 million users in December 2023. It also has 4.9 million monthly active users and garnered a net profit of $27 million for the first nine monthsm of the year, up from $23 million in the financial year 2023. Moreover, it's projecting $75 million in net profit in 2025.