THE ROLE OF COMMERCIAL BANKS IN REDUCING POVERTY AT THE MAHALLA LEVEL IN UZBEKISTAN: FINANCIAL INCLUSION AS A SYSTEMIC TOOL

This article examines the role of commercial banks in reducing poverty at the mahalla level in Uzbekistan within the framework of the mahalla-based working system introduced in 2021. Drawing on data from the Central Bank of Uzbekistan, the Agency of Statistics, and the Ministry of Poverty Reduction, the study analyses the theoretical underpinnings of financial inclusion as a mechanism for alleviating poverty and evaluates the effectiveness of preferential lending programmes targeting low-income households. The article applies a comparative institutional approach, contrasting international models including the Grameen Bank Bangladesh, PMJDY India, and M-Pesa Kenya with emerging Uzbek practices. Findings indicate that mahalla-level collaboration between banks and district administrators significantly lowers informational asymmetry, thereby reducing the cost of serving unbanked populations. Pilot data from Surkhandarya and Fergana provinces demonstrate a loan repayment rate of 94 per cent among poverty-targeted borrowers, surpassing the national average by two percentage points. The article concludes with policy recommendations aimed at scaling Social Banking principles and digital financial technologies within the mahalla institutional framework to achieve the national poverty reduction target of below 7 per cent by 2026.