Uzbekistan, Kazakhstan Discuss Joint Trade Due Diligence Firm

Tashkent, Uzbekistan (UzDaily.uz) — Business representatives from Uzbekistan and Kazakhstan have proposed creating a joint company to assess the reliability of counterparties for factoring in bilateral trade. The proposal was discussed during the Uzbek-Kazakh Business Forum in Tashkent.

Factoring Hindered by Limited Counterparty Information

Davron Vakhabov, Chairman of the Chamber of Commerce and Industry of Uzbekistan, said the lack of an effective factoring mechanism remains an obstacle to trade between the two countries.

"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," he said.

Vakhabov said he had discussed the issue with Timur Ishmetov, Chairman of the Central Bank of Uzbekistan. According to him, one proposal under consideration is to compile a list of reliable counterparties in both countries through the intergovernmental commission.

Kanat Sharlapayev, Chairman of the Presidium of Kazakhstan's National Chamber of Entrepreneurs Atameken, supported the proposal.

"This is a very good proposal. The issue of cross-border settlements exists not only between Uzbekistan and Kazakhstan — it significantly constrains trade growth," he said, adding that similar difficulties also affect trade with Afghanistan and Middle Eastern countries, where the two sides plan to expand jointly.

Vakhabov also said Uzbekistan is preparing a document under which an Uzbek bank would provide factoring to exporters, while part of the interest rate would be subsidised by the state. He proposed testing the mechanism as a pilot project involving 50 companies supplying wheat.

Kompra's Experience

A possible solution was presented by Gaukhar Baltabayeva, Chief Executive Officer of the Kazakh holding company Kompra, which is part of the Dream group of companies.

According to Baltabayeva, Kompra ranks first in Kazakhstan in the development of IT solutions and is among the top five companies in Central Asia. Its products are available in 11 countries.

She said the company combines public and government data sources, enabling businesses and banks in Kazakhstan to make lending and counterparty decisions within seconds.

"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 said, adding that Kazakhstan's largest banks use the company's data when making 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 creating a joint project based on Kompra's experience.

"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," he said.

Vakhabov immediately endorsed the proposal. "I was thinking the same thing while we were discussing factoring. Agreed," he said.

The forum did not discuss specific details or the future structure of the proposed company. The parties agreed to continue negotiations through working-level discussions.