Expert opinions on Kyrgyz fintech and e-commerce market

E-Commerce and FinTech Hackathon 2019, organized by KG Labs and financially-supported by GIZ’s Trade Facilitation in Central Asia project and Interbank Processing Center, was held June 14-16, 2019 in Bishkek, Kyrgyzstan. We asked its mentors how they assess the state of the FinTech and e-commerce market in Kyrgyzstan. Here’s what they said. 


Azhar Mambetova, Head of Innovation Department in Kompanion Bank

The Kyrgyz fintech industry is just starting to develop. The main thing is everyone understands the need for digital transformation, change of processes and approach to business. This is even fixed in the strategies of banks. But we do not yet have an appropriate ecosystem. It is difficult for big players to transform, and we have a few small fintechs.


The main driver for the fintech development in Kyrgyzstan should be human potential. We need to unite and learn new things. Imagine a bank that bought new systems, equipment, and more. If employees think the old way, it will not help. In this sense, a good example is DBS Bank in Singapore, which has invested $ 20 million in staff training.


Consumers need simple products. For example, there are still difficulties with the transfer of funds and payment for services, especially in Kyrgyz regions. As for business, everything is also ambiguous. Most companies prefer to cash out, although it is obvious that this is not always convenient. Something is needed in this direction.


Now the National Bank of the Kyrgyz Republic (NBKR) is considering the regulation on the regulatory sandbox. It should simplify the development of new products: it will be possible to test them on a small number of users on the basis of a temporary NBKR resolution. I think this is a step forward.


Aikanysh Saparalieva, president of E-commerce Association of Kyrgyzstan

We do not have statistics on the use of e-commerce services. But it is obvious that these are very modest numbers. For example, in Kazakhstan, such services account for only 1.8% of the total retail turnover. The situation is even worse in other countries in the Central Asia.


New e-commerce products should be adapted adapt to the population. So far, many of us are skeptical of online shopping or simply do not have the skills to do so. At the same time, foreign marketplaces are actively used in Kyrgyzstan, the number of parcels from abroad is increasing every year.


The development of the market requires an ecosystem, ubiquitous Internet access, urbanization, streamlined logistics and more flexible payment systems. In addition, a law on e-commerce is being developed in Kyrgyzstan. The goal is to create favorable conditions for entrepreneurs, and I hope that it will be achieved. Because it’s impossible to expect this industry to develop in case if you strongly regulate it.


Alexander Sobolev, developer at Mad Devs 

First of all, Kyrgyz market needs solutions which could simplify or automate something. This also applies both e-commerce and fintech. The main thing for regulatory authorities is to create conditions for companies that can develop something like this while remaining within the regulatory framework.


Daniel Vartanov, CTO at

Average Kyrgyz citizen has a little access to financial services. Therefore, Fintech is in its infancy. Perhaps the reason is the excessive regulation of the sphere and the absence of an appropriate consumption culture. If a person has no idea of banking services, he is unlikely to be interested in such things. It’s hard to say something about the e-commerce market too. We order a lot from eBay or Amazon, but it’s not about local platforms.


Edil Ajibaev, CEO and founder at

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E-commerce in Kyrgyzstan is just beginning to develop, it happens slowly. This is due to the small market volume and consumer habits. After all, the advantage of online stores should be that buying is easier and cheaper than in regular stores. But we have a large part of potential buyers in Bishkek, who this it’s easier to come to a regular store. Another problem is that we are not used to paying online via banking cards. E-commerce market development is possible only in a case when people must see benefits in e-commerce services.


Market size is the main problem for local startups. High-quality solutions require investment, while there are few of them. In addition, new services need to be tested, and it means costs not everybody could manage. Therefore, you should pay attention to profitable areas. These are lending, purchase and sale of tickets, construction, sale of cars, agriculture. Where possible, it makes sense to compete with global players. For example, you can create a service for booking hotels in remote regions, if we are talking about eco-tourism.


In general, during the last 5 years we have seen some progress. For example, High Technology Park of the Kyrgyz Republic and E-commerce Association of Kyrgyzstan were established. But there is no legislative basis, and this must be corrected

Peter Fabian, advisor at Business & Finance Consulting

There is a small market in Kyrgyzstan, and people have problems with access to financial services. However, in recent years the situation was improving. For example, we could consider the National payment system “Elkart” as a completely modern solution.


In Central Asian countries, consumers are skeptical of banks because of unclear tariffs and conditions. The simpler and clearer the product, the more it will be used. It can be quite obvious solutions like paying utility bills and home Internet from a smartphone. In my opinion, everyone will benefit from the availability of such services. For example, there will be no need to install a bunch of terminals – they are not so cheap, it’s easier to develop a good application once.


The development of fintech in Kyrgyzstan is impossible without the interaction of banks and regulatory authorities. It is advisable to simplify it as much as possible.