COFACE: loan default to advance 50pc per year

0
 
Loan default in Romania will increase by 50% a year in the immediate future because of increased personal loan availability, show data with COFACE Romania.
 
Romania’s debt recovery market started shaping up in 2004, with the expansion of consumer and personal loans, and it has continued to develop at an average annual rate of 70%.
 
Currently, there are some 30 debt recovery agencies operating in Romania that are employing some 1,500 people.
 
A COFACE report indicates that there are increasingly more insurance and telecommunications companies outsourcing their debt portfolios. A rise in per loan default rates has lately become visible, mainly because of new loan ceilings, a rapid growth in outstanding repayment of eurodenominated loans, the cancellation of loans granted on surety, as well as because of an increase in the success of the debt recovery agencies thanks to the use of increasingly more sophisticated recovery solutions and the use of smart IT technologies.
 
The debt recovery market is shown as having significantly evolved since 2006. While in 2006 the highest rate of loan default was recorded in consumer loans (55.45%), the consumer loans in default have since substantially decreased to a current 26.4%. The main explanation is a halt on granting loans solely on producing the identity card.
 
Personal loans are now making up the bulk of the loans, 69.5% of the total crediting, up from 40.6% in 2006.
 
According to the COFACE report, debt buying is a new trend emerging in Romania, with increasingly more banks following this procedure because of the opportunities it provides for improving financial performance and the balance sheet, for cancelling the need for setting aside provisions, and for turning liquid debt that is deemed lost.
loading...
Citește și

Spune ce crezi

Adresa de email nu va fi publicata

Acest sit folosește Akismet pentru a reduce spamul. Află cum sunt procesate datele comentariilor tale.