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The debt collection market is dynamic and competitive

In 2014, debt recovery registered an increase of 24% as compared to 2013.

In order to analyze the evolution and performance of the debt collection market, AMCC has developed together with Ensight Management Consulting, a detailed study of the debt collection sector. This study was prepared in accordance to data submitted by 12 AMCC members.


Key findings of the study:
The past performance of the debt collection sector has been characterized by a fluctuating evolution. Periods of market growth were followed by intervals of decrease within the sector. In this context, the debt collection market has registered a 12% yearly decrease in terms of debt referred during 2011-2014. In 2014, debt referred has registered a 28% decrease as compared to 2013, mainly due to the B2C debt referred, which has a 34% decrease in 2014, as compared to 2013.


In turn, debt recovery registered a 7% yearly increase during 2011-2014. In particular, debt recovery has registered a 24% increase in 2014, as compared to 2013.
 

 

The overall revenue increase registered in 2014 was of 24% as compared to 2013, mainly due to purchased debt volumes handled during the period. The expectations for the debt collection market in 2015 are constant due to market and political stability.

 

 


Debt Referred Sector
The debt referred market is mixed, distributed by activity domains as follows:
B2C – 60%                      B2B – 8%                    Debt Purchase – 32%


B2C market volume. The overall B2C debt referred in the second semester of 2014 reached ~558 mill EUR for the Romanian market.


B2C market dynamics. The overall B2C debt referred in 2014 has increased by 7% in the second semester of 2014 as compared to the first semester of 2014. This evolution took place in spite of a 24% decrease in B2C serviced consumer debt. The decrease in domestic consumer debt referred is mainly due to a significant decrease in average value in EUR/case referred; Domestic purchased debt has increased with approximate 60%, from 130 mill EUR in the first semester of 2014 to 208 mill EUR in the second semester.


B2B market volume. The overall B2B debt referred in the second semester of 2014 reached ~41 mill EUR for the Romanian market, an approximate 7% of overall debt referred in Romania during the second semester of 2014.


B2B market dynamics. B2B debt referred in the second semester of 2014 decreased by 67% as compared to the same value registered in the first semester of 2014. The B2B domestic serviced consumer debt has registered a 10% decrease in the second semester of 2014 as compared to the first semester, while domestic purchased debt reached a minimal value of ~ 2 mill EUR in the second semester of 2014.


The 12 respondent companies members of AMCC cover a representative estimate of 80% of the total debt collection market (debt servicing and debt purchasing) and 90% in terms of debt servicing market. Currently they have an estimated number of 3000 employees.


The biggest share of debt collection activities targets B2C debt collection services, involving almost ~60% of current employees. Only 8% of overall employees currently perform legal debt collection activities.


“The Romanian debt collection market is a dynamic and competitive market. Currently we can see a slight increase of the industry mostly due to the latest trends of banks selling their portfolios of non-performant loans, in order to stimulate the domestic consumers to contract new loans. Debt collection agencies in Romania remain focused on the amicable debt collection phase, while the written correspondence remains the most utilized means for debt collection in Romania.” says Georg Kovacs, President of AMCC.
 

Authors

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ENSIGHT MANAGEMENT CONSULTING SRL