Page 136 - "Green Investments and financial technologies: opportunities and challenges for Uzbekistan" International Scientific and Practical Conference

“Yashil investitsiyalar va moliyaviy texnologiyalar: O‘zbekiston uchun imkoniyatlar va muammolar” mavzusida xalqaro
ilmiy-amaliy anjuman materiallari to‘plami (Toshkent, JIDU, 2025-yil 7-may)

The landscape of corporate insolvency in Uzbekistan does not show
considerably high rates of failure, however, still, the country’s insolvency resolution
process faces challenges. In terms of recovery rate, it has shown a relatively lower
rate compared to some other countries at 34.4 cents on the dollar and an average
duration of 2.0 years, according to the documents by the World Bank Group in
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2020. The outcome often involves asset sales rather than business continuation.
Data prepared earlier in 2017 showed lengthy procedures, for instance, 246 days, 17
procedures, and costs at 10.0% of the estate's value, whereas forecasts in January
2023 indicated decreasing bankruptcy risks. However, surges in consumer debt post-
COVID-19, with increasing non-performing loan ratios by 2021 before
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decreasing , suggest potential economic vulnerabilities.
Uzbekistan’s insolvency framework yields modest recoveries – only about
34.4¢ on the dollar according to World Bank data – and is slow (around 2.0 years
on average). These lengthy resolutions often culminate in liquidation rather than
rehabilitation and points to the need for preventive measures. Common causes of
business failure in Uzbekistan have been observed to be poor operations and
financial management, lack of experience, over-investment, weak credit practices,
insufficient planning, unsuitable location, and ineffective inventory control. SMEs
(small and medium-sized enterprises) face additional obstacles like underdeveloped
infrastructure, a shortage of skilled specialists, limited access to credit, and high-
interest rates as well. Not just the issues related to business performance, but
corruption and institutional constraints, including weak frameworks and

bureaucratic impediments, also contribute to business closures. The lengthy
insolvency process highlights the need for effective preventative measures, where
digital transformation can play a significant role in building resilience. Uzbekistan
has experienced rapid digital transformation in recent years, such as:
- The COVID-19 pandemic accelerated digital adoption, with 51.2% of firms
increasing their use of digital platforms in 2021 ;
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- Online banking users reaching 34 million;

- The IT sector has seen remarkable growth, with IT service exports increasing
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20-fold from 2020 to $344 million in 2023 ;

112 Uzbekistan - Doing Business
https://archive.doingbusiness.org/content/dam/doingBusiness/country/u/uzbekistan/UZB.pdf
113 New beginnings: Resolving consumer insolvencies in Central Asia - World Bank Blogs
https://blogs.worldbank.org/en/psd/new-beginnings-resolving-consumer-insolvencies-central-asia
114 Abdumalik Abdurashidovich, A. (2025). Macroeconomic Determinants of Digital Technology Adoption in
Uzbekistan. American Journal of Economics and Business Management, 8(4), 1593–1604.
https://doi.org/10.31150/ajebm.v8i4.3472
115 Digital Transformation Scoreboard,
https://ecesbf.uz/f/16042024_digital_transformation_scoreboard_in_uzbekistan_chapter_2.pdf

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