On 15 April 2021, the day of the EBRD’s 30th birthday, the EBRD and FCI joined forces to present online the first factoring conference in Uzbekistan.
More than 100 banking professionals from local and international commercial banks took part, along with the Central Bank of Uzbekistan, Ministry of Investment and Foreign Trade of Uzbekistan, and importers and exporters.
Factoring continues to grow in both mature and emerging markets. Factors or factoring divisions/departments of banks are able to provide more financing than traditional lenders to small and medium-sized enterprises (SMEs) while limiting their credit risk to acceptable levels.
And companies use factoring as a flexible source of financing as it enables much-needed access to finance, thereby improving their competitiveness based on Open Account Trade, which has proven to be the most effective system during periods of financial and economic hardship.
A typical service provided by a factor includes investigating the creditworthiness of the seller’s buyers, assuming credit risk on those same buyers and providing credit protection against the debtor default and/or bankruptcy.
Ultimately, the factor provides the seller a guarantee of the debtors’ inability to pay, prompt collection of accounts receivable, manages the receivables ledger, and provides financing through immediate cash advances against outstanding and assigned receivables.
The conference offered attendees the opportunity to not only discuss the current state of the industry, new challenges and product and market developments, but also to network with players from the same region.
More specifically, the event looked to:
- furnish attendees with the knowledge to establish factoring operations and provide SMEs with access to financing and receivables management services
- raise industry awareness of factoring
- enhance attendees’ understanding of various aspects of factoring, including:
· the advantages of factoring and how it compares with traditional trade finance products
· the legal basics and benefits of a regulatory framework
· the mechanics, operations and risks management of factoring and its positive impact on the economy during times of crisis, and
· global trends in different markets.
We thank our guests Alkis Drakinos, Director, Head of Uzbekistan, Saidkamolkhon Burkhanov, Head of Banking and Finance Department at the Ministry of Investment and Foreign Trade of Uzbekistan; Abrorkhodja Turdaliev, Deputy Governor of Central Bank of Uzbekistan; and Kamola Makhmudova, Associate Director, for welcoming the participants and opening the conference. We also thank Peter Mulroy, FCI Secretary General and the team of FCI (formerly known as Factors Chain International) for an informative presentation and our panellists Zafar Azimov, Deputy Chairman, UzPromstroybank, Shuhrat Babadjanov, Head of Trade Finance, Ipak Yuli Bank and Amirhon Hodjaev, Head of International Transactions and Trade Finance Department, JSCB Hamkorbank, for sharing their experiences.
The same factoring conference was delivered in the Kyrgyz Republic in April 2021. It was the first such conference organised there by the EBRD, FCI and supported by the National Bank of Kyrgyz Republic.
More than 100 banking professionals from local and international commercial banks took part in the Uzbekistan factoring conference