Tapping into Uzbekistan’s factoring potential
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.”
Key Topics
- Factoring market foundations
- Regulatory framework design
- Financial education gaps
- Factoring technology infrastructure
- SME liquidity access
- International institutional support
Key Insights
Expert Analysis
The perspective from Efcom underscores that factoring markets do not emerge through regulation alone, but through the alignment of legal frameworks, market understanding, and scalable technology. Aziz Kakhkharov frames IT infrastructure as the final multiplier that converts policy intent and education into executable liquidity for SMEs, particularly as transaction volumes increase.— Aziz Kakhkharov
Key Findings
- Regulatory and compliance frameworks were identified as the first hurdle to factoring adoption in Uzbekistan.
- Market participants often lack clarity on the difference between factoring and traditional credit.
- Factoring is positioned as a speed-focused liquidity solution rather than a document-heavy process.
- Automated IT systems are required to support large volumes of factoring transactions.
- Efcom provides factoring software to institutions ranging from global banks to regional startups.
- International organisations including IFC, FCI, and EBRD are actively involved in supporting market development.
Implications
- Well-designed regulation can unlock broad-based participation across banks, SMEs, and corporates.
- Improved financial literacy is necessary to stimulate demand for receivables finance products.
- Digital infrastructure determines whether factoring can scale beyond pilot programmes.
- External expertise reduces execution risk in early-stage market development.
Key Takeaways
- Factoring in Uzbekistan will only scale sustainably if regulation, education, and technology advance together, transforming policy intent into fast, accessible liquidity for SMEs.
