Uzbekistan, Kazakhstan Discuss Joint Trade Due Diligence Firm
Uzbek and Kazakh business leaders discussed creating a joint company to assess counterparties for factoring and facilitate bilateral trade.
Uzbekistan and Kazakhstan are exploring the establishment of a joint entity to conduct due diligence on trade counterparties, a move aimed at facilitating factoring in bilateral trade. This concept emerged during the Uzbek-Kazakh Business Forum held in Tashkent.
**Factoring Impeded by Limited Counterparty Information**
Davron Vakhabov, Chairman of the Chamber of Commerce and Industry of Uzbekistan, highlighted that the absence of an efficient factoring mechanism currently impedes trade between the two nations. He stated, "If a company wants to export its products today, banks need time to assess the entrepreneur in the other country before deciding whether factoring can be provided."
Vakhabov mentioned that he had discussed this issue with Timur Ishmetov, Chairman of the Central Bank of Uzbekistan. One suggestion under consideration is the creation of a list of reliable counterparties in both countries, to be compiled by an intergovernmental commission.
Kanat Sharlapayev, Chairman of the Presidium of Kazakhstan's National Chamber of Entrepreneurs Atameken, expressed his support for the proposal. He remarked, "This is a very good proposal. The issue of cross-border settlements exists not only between Uzbekistan and Kazakhstan — it significantly constrains trade growth." Sharlapayev added that similar challenges affect trade with Afghanistan and Middle Eastern countries, regions where both nations intend to expand their joint trade efforts.
Vakhabov also disclosed that Uzbekistan is developing a framework where an Uzbek bank would offer factoring to exporters, with the state subsidizing a portion of the interest rate. He suggested piloting this mechanism with 50 companies involved in wheat supply.
**Kompra's Expertise**
Gaukhar Baltabayeva, Chief Executive Officer of the Kazakh holding company Kompra, part of the Dream group of companies, presented a potential solution. Baltabayeva stated that Kompra leads in IT solution development in Kazakhstan and ranks among the top five companies in Central Asia, with products available in 11 countries.
She explained that Kompra integrates public and government data sources, enabling businesses and banks in Kazakhstan to make lending and counterparty decisions rapidly. "We conduct checks not only on Kazakh companies but also on all foreign companies that Kazakh entrepreneurs work with, including Uzbek companies. Last year alone, we conducted more than 200 checks on such companies," she noted, adding that major Kazakh banks utilize Kompra's data for lending decisions.
**Uzbek Proposal**
Fakhriddin Ilyasov, co-founder of Marafon Group in Ferghana and a member of the Council under the President of the Republic of Uzbekistan, proposed establishing a joint project based on Kompra's successful model.
He stated, "Gaukhar knows who can receive factoring and who cannot. We would like to create exactly the same portal in Uzbekistan to assess the reliability of counterparties. Let's establish a joint company and then jointly offer it to the Uzbek-Kazakh fund so that it can decide who is eligible for factoring."
Vakhabov promptly endorsed this idea, saying, "I was thinking the same thing while we were discussing factoring. Agreed."
The forum did not delve into specific details or the future organizational structure of the proposed company. Both parties agreed to continue discussions at a working level.