Page 29 - "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)

FinTech to catalyse economic growth has become a focal point for academics,
governments, and global financial institutions alike. The theoretical nexus between
finance and economic growth has been extensively studied, with traditional literature
recognising the vital role of financial development in resource allocation, investment
efficiency, and entrepreneurial activity. However, with the evolution of digital
financial services, a new body of research has emerged, highlighting how FinTech
extends financial inclusion, lowers transaction costs, enhances capital access, and
fosters productivity growth—especially in emerging markets. For instance, studies
such as those by Philippon (2016), Sahay et al. (2020), and Cevik (2024) provide
robust empirical evidence showing positive correlations between FinTech adoption
and GDP growth, particularly via digital lending and mobile payments.

From China’s rapid expansion of digital payments through Alipay and
WeChat Pay, to India’s record-breaking Unified Payments Interface (UPI) volumes
and the United Kingdom’s progressive regulatory sandbox model, global examples
point to FinTech as a driver of inclusive and resilient economic development. At the
same time, developing economies like Uzbekistan are leveraging FinTech to
enhance financial access and reduce economic informality, supported by rising
mobile and internet penetration. Despite these promising trends, the integration of
FinTech into economic systems is not without challenges.
Issues such as regulatory gaps, digital inequality, cybersecurity risks, and the
environmental impact of blockchain technologies remain critical. Moreover, the
scalability of FinTech solutions in low-income economies is contingent on
infrastructure, trust, and enabling policy environments.

This paper seeks to explore the complex relationship between financial
technologies and economic growth through a multi-dimensional lens. It builds on
the endogenous growth theory (Romer, 1990) and FinTech adoption frameworks to
assess the role of FinTech in transforming economic dynamics. The study
incorporates cross-country evidence, theoretical foundations, and case analyses,
with a special focus on Uzbekistan as a representative emerging market. It also
provides comparative insights from the United States, the European Union,
Singapore, China, and India.

The role of innovation and knowledge in fostering long-term economic
growth is firmly rooted in endogenous growth theory, pioneered by Paul Romer
(1990). Unlike exogenous models that treat technological progress as an external
factor, endogenous models incorporate innovation as a result of investment in human
capital, R&D, and knowledge spillovers. In this context, FinTech is a prime example
of a technology-driven sector whose growth is propelled internally by the financial
system’s evolving needs, consumer demand, and institutional reform. FinTech
contributes to economic growth by enhancing productivity, increasing the efficiency
of financial intermediation, and expanding access to capital. This aligns with

29