VIDEO | Tapping into Uzbekistan’s factoring potential - Trade Treasury Payments

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At the FCI and IFC conference in Tashkent, Trade Treasury Payments (TTP) spoke with Aziz Kakhkharov, Assistant in Sales & Marketing at Efcom GMBH, to discuss the structural foundations necessary to unlock factoring in Uzbekistan.

Kakhkharov pointed to three key hurdles. “The first one would be the regulatory and compliance,” he said. “Factoring rules have got to be written and shaped in a way that will be attractive for everyone – for the banks, for the SMEs, for corporates.”

The second challenge, he explained, is educational. The market still lacks a strong financial culture around receivables finance. “People need to clearly differentiate between credit and factoring. Factoring is about speed. It’s not a very long journey with documents, it’s just about getting your cash very fast.”

But even with supportive regulation and increased awareness, Kakhkharov emphasised that a well-functioning IT infrastructure is essential. “The third one that I would mention comes on the top of all of this,” he said. “This is the IT structure, the software which enables the automation, which enables the big volumes of factoring transactions.”

Efcom, a German software provider, sees considerable potential in Uzbekistan as the economy expands and financial services modernise. “If we assume that the factoring volume will grow as in developed markets – up to 5% or 10% – it’s going to be a huge volume, huge business, a lot of liquidity for SMEs, which will help to accelerate the economy even more.”

Kakhkharov said that Efcom hopes to support this growth through its experience building out digital infrastructure for factoring platforms around the world, from large corporates like Deutsche Bank to startups in Eastern Europe and India.

He also welcomed the involvement of international institutions such as the IFC, FCI, and EBRD. “It’s a very positive thing that the central bank, that our president is giving effort to invite such players who already have experience helping to develop such countries.”

His advice for local financial institutions? Stay the course, but learn from those who’ve already navigated this journey. “Use the experience of someone who failed a lot but also succeeded a lot,” Kakhkharov said. “There is a chance that they are making it right from the start.”