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.

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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.

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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.

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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.