Page 30 - "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)

Romer's proposition that knowledge accumulation and innovation can yield
increasing returns and sustain economic expansion. According to Sahay et al.
(2020), financial development spurred by FinTech increases total factor productivity
through more efficient resource allocation, supporting the key mechanisms of
endogenous growth models. Joseph Schumpeter’s theory of creative destruction also
offers an important lens through which to view FinTech’s impact.

Financial technologies disrupt traditional institutions, introduce new business
models, and stimulate competition. These disruptions not only displace outdated
systems but also pave the way for productivity-enhancing innovations. This
Schumpeterian process is visible in the proliferation of peer-to-peer lending
platforms, digital payment ecosystems, and decentralized finance (DeFi) protocols.
Moreover, empirical literature shows that countries experiencing greater levels of
FinTech disruption also tend to demonstrate higher entrepreneurial dynamism and
venture capital flows. For example, the UK’s Financial Conduct Authority (FCA)
regulatory sandbox encouraged over 700 FinTech experiments between 2016 and
2023, resulting in faster time-to-market for new technologies and improved access
to finance for small firms (World Bank, 2022). The literature broadly identifies four
major channels through which FinTech promotes economic growth:
• Financial Inclusion: FinTech reduces the cost and complexity of accessing
financial services. Studies such as Beck et al. (2016) and Kim et al. (2018)
found that digital payments and mobile money platforms like M-Pesa in
Kenya significantly boosted household savings and income-generating
activities, especially among rural and female populations.

• Credit Expansion and SME Financing: Digital lending platforms have
improved credit access for underbanked SMEs by leveraging alternative data
and AI-driven credit scoring. Li, Wu, and Xiao (2019) documented that digital
credit expansion in China was strongly associated with higher household
consumption and SME output.

• Efficiency and Cost Reduction: FinTech solutions streamline operations
through automation and digitalisation, reducing transaction costs. According
to the IMF (2021), mobile money systems reduce transaction time by 60–80%,
improving liquidity management and accelerating economic transactions.

• Capital Formation and Innovation: Crowdfunding and tokenization platforms
enable new forms of capital mobilisation, especially for start-ups and creative
industries. According to Zetzsche et al. (2020), equity crowdfunding
platforms in the EU raised over €2.5 billion between 2017 and 2022, directly
contributing to job creation and new business formation.

Several studies have developed composite indices to measure FinTech development
and its economic effects. The World Bank’s Aggregate FinTech Activity Index
measures activity across equity investments, digital credit usage, mobile payment

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