Russian leadership

Dmitry Shevchenko, Executive Director at the Association of Factoring Companies (AFC) in Russia, talks to Factorscan about his recent appointment to the head of the association, his expectations for the development of the body moving forward and why industry developments in Russia will take their own specific path.

Shevchenko was appointed as Executive Director of the Russian association back in May, replacing the outgoing Olga Gritsay and Irina Popova, to head up the efforts of the Russian industry. Previously at Promsvyazbank, he ‘took the flag in his arms' a couple of months ago, and will now be leading the development of AFC and the wider industry moving forward. With the country's potential for factoring growth, leading Russia's industry looks set to be a challenging task.

I began our conversation by asking Shevchenko about the association's membership. Presently, the association has five full members and two associate members, although Shevchenko said that the organisation plans to ‘continue to grow, although not necessarily aggressively'. Presently the association already accounts for ‘more than 50% of the market' and it seems that adding numbers for the sake of doing so, is not on the agenda. Five of Russia's top ten are already members and Shevchenko expressed his hope that they would capture more members from among the leading players. ‘We need strong members' he said, with the association's short-term goal being to increase its membership to ten players.

An industry ‘knowledge database'

Regarding the role of the association, Shevchenko was clear that it should be a ‘centre of information' for its members; a ‘knowledge database' that will help to promote understanding of the offering and ‘enable clients to do their business better'. Shevchenko regards the association as a facilitator and a conduit for information to both factors and their clients. The association needs to work at becoming closer to clients and debtors in order to strengthen their understanding of receivables finance, Shevchenko explained. And this is where the association comes in - ‘maximising the assistance we extend to our members'. Finally, on the topic of information, he said that the association ‘should be the centre for all information and communication' on Russian factoring, which can then be disseminated to members and their clients, building understanding of the offering.

Next I asked Shevchenko what plans he had for the association moving forward. He said that there were a number of developments in the pipeline, but that exact timescales for some of these were yet to be finalised. One of the areas he said that the association was working on was training, which he described as being ‘very important'. Plans have been set in train to establish training for the industry provided by the association, but this is not likely to begin before the ‘end of 2010, may 2011'. The cost of training has been an impediment, Shevchenko explained, saying that it is ‘difficult to justify the cost of training to [member] CEOs'. Nevertheless, the association is looking for members suitable to provide training to other members, he said.

The Russian association: reaching a wider audience

Moving forward, Shevchenko made clear that the association needs to communicate with a wider audience in order to promote the position of factoring within Russia's wider financial community. We need to enter into communication with ‘banks, the Central Bank, insurers and others' in order to further develop the industry, he said. The focus would be on ‘strong new members' such as leading banks Gazprom, Alpha Bank and VTB, but also on bringing ‘small and new factors' into the association. Shevchenko explained that by promoting the industry and bringing new players onboard, he hoped that larger, more experienced members would be able to share their experiences and knowledge for the benefit of the wider factoring community.

Increasing transparency

Business transparency has been highlighted as an issue in Russia by a number of commentators in recent years and when asked, Shevchenko was inclined to agree. The association was looking to improve the situation, he said, with transparency already beginning to improve, but ‘step-by-step'. Business opacity continues to represent an issue for the industry, and the association has sought to increase information sharing among its members with the creation of a regular bulletin informing members about developments. And this seems to be the start of a more concerted effort to centralise useful business information within the association. Shevchenko explained that AFC was already working on a database that would provide its members with mutually shared debtor information, aimed at improving the business environment for factoring. He indicated that he expected the database to be up and running by the start of 2011.

Might self-regulation be the future?

Asked about Russia's legal and regulatory environment, Shevchenko said that there remained ‘only one problem with the environment - no regulation'. Russia does not require factors to be licensed and as such ‘any company can offer factoring'. This means that ‘bad things can often penetrate the market', with unlicensed, ‘black' factors doing little for the development of the industry. ‘Our goal is to be self-regulated', Shevchenko explained, with ‘every member of the association agreeing that this is a realistic goal'. And it seems that the industry cannot simply wait for the Duma to introduce new controls. The association has therefore ‘begun its dialogue' with the government, Central Bank and the ministries and Shevchenko hopes that in ‘the next two to five years' the industry will move closer to self-regulation. And as Shevchenko made clear, ‘economic improvements and more members [within the association] will help' to make such a development a stronger possibility.

Russia: going its own way

Finally, I asked Shevchenko if there were any major lessons that the industry in Russia could draw upon from more mature markets. Shevchenko said that the association could learn a lot from international bodies like FCI and IFG regarding ‘structure and connections', but ‘Russia always has its own way'. ‘Our association must take the best experiences of others, but we shouldn't lose our [own national] identity'. And we can look to a lot of advantages afforded our domestic industry, Shevchenko said - it is ‘fast growing, faces low competition, low penetration, with a sizable market across a range of industries'. Talking with Shevchenko and despite the evident complications, there is little denying the potential of the country.
 
Nicholas Comrie, Factorscan.com

Источник: АФК