Debt collectors: Requests from banks are up by over 30%

Banks are selling non-performing loans to specialised debt collection companies increasingly often, in order to clean up their balance sheets, with demand for such services up by over 30% last year, companies in this business say. “We noticed a rise in debt collection services back in late 2008, both for individual debtors and for corporate ones. In the first quarter of 2009 we recorded a 30% rise in the number of requests received from banks, compared with the same period in 2008,” says Georg Kovacs, Managing Director of EOS KSI Romania, one of the largest companies of this kind, on a market put at 25-30 million euros in 2008. Debt collection from individuals accounts for two thirds of the market. Banks outsource around 60-80% of the overall non-performing loans, according to Constantin Coman, Debt Collection & Legal Manager at Coface Romania, another major player on the market. Contacted by ZF, several top-ten banks declined to provide data on the volume of loans sold and on the average price they get from debt collection firms.