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The domestic credit market is growing both in terms of lending and in the composition of participants.
But it is worth remembering that not everyone who takes out a loan returns it. It is then that a collector of overdue debts comes to the rescue.
Ruslan BATISHCHEV, Doctor of Economics
The first collection company in Moldova appeared at the end of 2007. 10 years ago, few could tell who the collector is and what its main activity is. The evolution of the credit market, the growth of loan portfolios of players have led to an increase in the number of problem and adverse loans. In the circumstances, lenders are forced to pay attention not to new and promising customers, but to “knock out” overdue debts. Under these conditions, it is more profitable for lenders to give up this activity to a professional player — a collector who will deal with this problem. At the same time, the use of the institution of collectors is beneficial not only to the creditor, but, no matter how strange it sounds, to the debtor. Collectors can make certain concessions to the debtor, try to restructure his debt, and re-credit the debtor.
The main market players include: INCASO, PfB Collection, Global Credit Solutions (GCS-Moldova), MSA Finance, Colect Capital Grup, Lex Plus, Debit Grup, Collect House.
Of these, only three kindly responded to a request to tell about themselves and their activities. These are INCASO, PfB Collection and Global Credit Solutions (GCS-Moldova). The remaining participants, unfortunately, were less open to communication.
What is the situation on the collection services market? Director of the collection agency INCASO and president of the Patronage Association of Debt Collection Companies (APCD) Vyacheslav Myrza believes that everyone chooses the method of promoting interests in this market: “If you try to classify all participants in the collectors market, they can be conditionally divided into 3 groups:
Professional participants for whom collection activity is the main;
Small law firms, law firms, for which collection activity is one of the types of services provided;
The so-called gray collectors working outside the law or observing the law, but informally. We are trying to fight them. ”
Ruslan Nastas, the head of the marketing department of the collection agency PfB Collection, focuses on the fact that 4 persons can be involved in the collection of domestic enterprises: “This is a director, lawyer, accountant and sales agent. At the same time, the lawyer will immediately insist on judicial methods of debt collection, the accountant is usually not very competent in debt collection matters, and the sales agent, instead of increasing sales volumes, invades an unfamiliar area where its effectiveness will be a big question. They are interested in good relations with their customers and cannot “push” them. Despite the inefficiency of this process, it is in-company methods of debt collection that competition with collection companies is laid. ”
The main customers of the collectors are banks, financial, leasing and insurance companies, loan and savings associations, as well as legal entities, individual enterprises and limited liability companies.
“We specialize in 2 main areas: classic collection services, or mediation between creditors and debtors, and the purchase of debt portfolios, or cession. This type of activity does not develop in Moldova, first of all, due to the low culture in this matter, and also due to the lack of financial literacy. For example, in Estonia (population 1.3 million people) INCASO buys debt portfolios of € 50 million, while in Moldova it costs only € 3-4 million per year, ”says Vyacheslav Myrza. He notes that abroad everyone is engaged in what they are well versed in: banks, microfinance companies and legal entities give loans, and their return in case of force majeure is given to collectors. And the state (which annually writes off at least 40 million lei for the debts of individuals) could think about using the services of collectors, since it is costly to recover especially small debts.
Also, clients of collection agencies are individuals who lent money on receipt. Most of the customers are residents of the capital, which is not surprising, since this is where the main financial flows are concentrated.
“If we talk about customers,” continues Vyacheslav Myrza, “in our case, the main customers are microfinance organizations, mass service providers (telecommunications sector, housing and communal services) and banks. The latter resort to our services for consumer lending and for overdrafts issued, that is, for loans not guaranteed by a mortgage or collateral, in the amount of up to 150,000 lei. ”
Ruslan Nastas identifies the following groups of clients: “The first group is legal entities that have many debtors, but the amounts collected are insignificant (up to 1,000 lei). The legal entity itself, in order to successfully engage in debt recovery, needs to make additional investments, which is not so simple. The second group of clients are also legal entities that have fewer debtors, but the amount of debt is more significant (up to several million lei). If the company works with strategic clients that you don’t want to spoil relations with, then the collection deadlines are lengthened, and when patience and opportunities end, they turn to us. The third group is individuals who have a receipt that they owe (for example, former friends). ” He adds that the market for these services is growing annually from 10 to 15%. At the same time, enterprises with foreign capital better than domestic ones understand the advantages of working with collectors.
The main paradox of this type of activity is that the majority of non-payers are those who have the means to cover the resulting debt.
Sergey Baragan, director of the collection agency Global Credit Solutions, segments clients as follows: “Our main clientele is medium and large companies, as well as individuals who have provided loans to other individuals on the basis of a issued receipt. The minimum amount with which we begin to work is at least 5,000 lei. We are also engaged in international debt collection (from legal entities) and compiling a business dossier for clients. Generally, our clients can be divided into 2 categories: wholesale (the number of debtors is more than 5, and the total debt of each is at least 5,000 lei) and retail (the number of debtors is less than 5 lei, but the debt amount of each debtor is at least 10,000 lei). ”