Domestic debt collection market records 45 pct year-on-year increase in 2016

In 2016, the value of claims managed by Romanian companies on the domestic market increased by 45 percent year-on-year. The domestic debt collection market recorded a 45 percent year-on-year increase in 2016, a recent study revealed. The survey, published by the Commercial Credit Management Association – AMCC, was conducted together with Ensight Management Consulting.

The study authors are cautious regarding debt collection in 2017, due to new market regulations. According to the study, debt management companies and borrowers will need time to adapt to market changes. Despite these reservations, most members of the association believe that the debt ratio of the population will grow slightly over the next 6 months due to accessible credit for all. At the same time, it is expected that the number of people with payment difficulties will remain constant. As regards the volume of outsourced claims in Romania, the growth trend was maintained in 2016. Compared to 2015, the number of outsourced cases increased moderately by only 2 percent.

As regards the volume of outsourced debts in Romania, the growth trend was maintained in 2016. Compared to 2015, the number of outsourced cases increased moderately by only 2 percent.

Guaranteed outsourced claims in 2016 accounted for 2.5 percent (EUR 2.6 million) of total B2C (domestic) households’ external claims in terms of value, while guaranteed purchased receivables represented less than 1 percent (0.89 percent or EUR 1.2 million) of the total domestic bank receivables purchased.

The telecommunications sector was one of the most active sectors, the number of cases accounting for 68 percent of the total number of cases of externalized domestic claims.

The value of B2C (household) receivables collected in 2016 increased by 2 percent compared to 2015, as B2C outsourced claims increased by 31 percent in terms of value recovered. An important factor influencing this growth is related to the recent improvement of the Romanian economic environment.

B2B receivables (legal entities) collected in 2016 amounted to approximately 93.6 million EUR for the Romanian market, representing around 84,500 cases.

Revenues from debt collection increased year-on-year by 39 percent in 2016 due to revenue growth in all segments of activity, for instance the collection of receivables from individuals (B2C) recording a 6 percent increase, the collection of receivables from legal entities (B2B) recording a 197 percent increase, and the purchased receivables segment a 43 percent increase.

“The debt collection market in Romania is still dynamic and competitive. Debt management companies remain focused on delivering solutions to both corporate and legal borrowers, with priority being given to amicable settlement,” said Georg Kovacs, President of AMCC.