The project to improve the competitiveness of SMEs foresees the implementation of subcomponent 2.3, aimed at conducting a strategic assessment of factoring implementation in Kazakhstan with the acquisition of a factoring platform.

An Internet platform that enables SMEs to register (or secure) and verify their receivables will expand their financing opportunities for SMEs. Moreover, such a platform will enable the buyer to register all updates, including confirmations and disputes. It will allow financial organizations (Factors) to allocate funds for the purchase of invoices for payment. Such a program, which can also be called Return Factoring or Funding the Supply Chain, involves establishing a legal relationship between a financier and a large final buyer, under which Factor undertakes to finance bills issued by suppliers of a large company from the moment they are officially accepted for payment.

Thus, factoring platform implementation will improve the liquidity of suppliers by replacing receivables with cash. Suppliers can use such additional (off-balance) financing to increase sales of their goods and services by providing additional loans to their customers - SMEs, avoiding the negative impact on working capital. Using the platform, participating SMEs will receive more funding from suppliers, which they can use to expand their business.

Due to the elements of the guarantee structure and risk mitigation procedures, the cost of financing assumed in the factoring scheme is expected to be lower than the cost of traditional bank financing. In addition, reducing the cost of financing will increase the return on assets of suppliers.

In addition, the platform will ensure the stability of trade, improve working capital and provide high-quality information about the risks from several suppliers and buyers.

Currently, the Ministry of National Economy of the Republic of Kazakhstan has completed tender procedures for the procurement of services for detailed strategic analysis and research of the financing structure of SMEs on the basis of invoices, as well as the legislation of Kazakhstan with the formation of an operational architecture and a roadmap for implementing a pilot version of the factoring financing scheme March 5, 2019 No. KZ / SMEC / QCBS-07 with Capital Tool Company Consulting BV (Netherlands) with the implementation period - 11 months.

In 2019, CapitalToolCompanyConsultingB.V. in accordance with the contract will carry out:

  • determination of the necessary conditions (legislative, technical, financial, etc.) for the implementation of the factoring platform in the Republic of Kazakhstan;
  • a series of workshops for SMEs and other interested parties (total number of participants is about 600);
  • formation of 5 possible factoring platform models and selection of the best option;
  • development of technical specifications for the purchase of an online factoring platform;
  • identification of financial organizations that should be involved in the implementation of the project
  • increasing the competence of employees of interested parties.

The expected period of pilot implementation of this platform is the 4th quarter of 2020.

In the second quarter of 2019, Capital Tool Company Consulting B.V .:

  • analysis of the legislation of the Republic of Kazakhstan in the field of financial markets and services, procurement, information systems, etc .;
  • collection, analysis and assessment of the needs of SMEs in factoring and factoring platforms were carried out through seminars in the cities of Almaty, Aktobe, Ust-Kamenogorsk, Nur-Sultan, Shymkent and Karaganda. The total number of participants - SMEs was over 500;
  • analysis of the existing market of financing and factoring services;
  • analysis and evaluation of the interest of financial organizations of the Republic of Kazakhstan and ITC suppliers in creating a factoring platform in the Republic of Kazakhstan;
  • analysis and evaluation of the best international experience in the development, implementation and operation of factoring platforms in 8 countries.

    The project to improve the competitiveness of SMEs foresees the implementation of subcomponent 2.3, aimed at conducting a strategic assessment of factoring implementation in Kazakhstan with the acquisition of a factoring platform.

    An Internet platform that enables SMEs to register (or secure) and verify their receivables will expand their financing opportunities for SMEs. Moreover, such a platform will enable the buyer to register all updates, including confirmations and disputes. It will allow financial organizations (Factors) to allocate funds for the purchase of invoices for payment. Such a program, which can also be called Return Factoring or Funding the Supply Chain, involves establishing a legal relationship between a financier and a large final buyer, under which Factor undertakes to finance bills issued by suppliers of a large company from the moment they are officially accepted for payment.

    Thus, factoring platform implementation will improve the liquidity of suppliers by replacing receivables with cash. Suppliers can use such additional (off-balance) financing to increase sales of their goods and services by providing additional loans to their customers - SMEs, avoiding the negative impact on working capital. Using the platform, participating SMEs will receive more funding from suppliers, which they can use to expand their business.

    Due to the elements of the guarantee structure and risk mitigation procedures, the cost of financing assumed in the factoring scheme is expected to be lower than the cost of traditional bank financing. In addition, reducing the cost of financing will increase the return on assets of suppliers.

    In addition, the platform will ensure the stability of trade, improve working capital and provide high-quality information about the risks from several suppliers and buyers.

    Currently, the Ministry of National Economy of the Republic of Kazakhstan has completed tender procedures for the procurement of services for detailed strategic analysis and research of the financing structure of SMEs on the basis of invoices, as well as the legislation of Kazakhstan with the formation of an operational architecture and a roadmap for implementing a pilot version of the factoring financing scheme March 5, 2019 No. KZ / SMEC / QCBS-07 with Capital Tool Company Consulting BV (Netherlands) with the implementation period - 11 months.

    In 2019, CapitalToolCompanyConsultingB.V. in accordance with the contract will carry out:

    • determination of the necessary conditions (legislative, technical, financial, etc.) for the implementation of the factoring platform in the Republic of Kazakhstan;
    • a series of workshops for SMEs and other interested parties (total number of participants is about 600);
    • formation of 5 possible factoring platform models and selection of the best option;
    • development of technical specifications for the purchase of an online factoring platform;
    • identification of financial organizations that should be involved in the implementation of the project
    • increasing the competence of employees of interested parties.

    The expected period of pilot implementation of this platform is the 4th quarter of 2020.

    In the second quarter of 2019, Capital Tool Company Consulting B.V .:

    • analysis of the legislation of the Republic of Kazakhstan in the field of financial markets and services, procurement, information systems, etc .;
    • collection, analysis and assessment of the needs of SMEs in factoring and factoring platforms were carried out through seminars in the cities of Almaty, Aktobe, Ust-Kamenogorsk, Nur-Sultan, Shymkent and Karaganda. The total number of participants - SMEs was over 500;
    • analysis of the existing market of financing and factoring services;
    • analysis and evaluation of the interest of financial organizations of the Republic of Kazakhstan and ITC suppliers in creating a factoring platform in the Republic of Kazakhstan;
    • analysis and evaluation of the best international experience in the development, implementation and operation of factoring platforms in 8 countries.
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