Collection market of Ukraine
Why the collection market gains traction
The collection market of Ukraine is an important segment of economy, where the total debt amount being currently processed has already exceeded 100 billion Hryvnias. Economic interest of the market in work of collection companies is evident. Banks resort to help of collectors by selling debts in the form of whole portfolios in order to clear their assets and restore liquidity. Therewith, credit debt collection is not the core business of banks. In the framework of a factoring (assignment) agreement, collectors take over credit problems of the bank and through negotiation offer to discharge debts on mutually beneficial conditions. Thus, banks can restore the economy crediting function, because no economy of the world will work without the credit facility. Moreover, if creditors invest money in development of our economy, they count on guaranteed return thereof.
Why in Ukraine interest on bank credits are so high? Exorbitant percentage of credit defaults forces the banking system to secure itself. In its turn, the interest rate in Europe ranges from 4 to 7%, that’s how the troubled debt index looks like. Today, it is common knowledge that 65,000 of foreign currency borrowers in Ukraine are unscrupulous debtors. Almost 75% of them are businessmen who drive high-priced cars, lease out real estate or use it as the second or third residence, go abroad for recreation on a regular basis and monthly spend significant means for meals and garments. Within seven years, they violate their credit repayment obligations and fail to pay money for the debt. Meanwhile, 10 million of depositors are hostages of credit frauds, since they cannot receive their deposits because of such irresponsible debtors.
Understanding the depth of the problem, one can draw the conclusion: Will the International Monetary Fund allocate money to the country where its residents unreasonably avoid paying credit debts and by doing so undermine the banking system and economy of Ukraine? Of course, not.
It should be noted that there are also responsible citizens who beat a path to us with an intention to settle the issue of credit repayment obligations. LLC “UkrBorg” considers its mission is to find the debt repayment option suitable for everyone. Owing to unique and flexible debt rescheduling schemes, LLC “UkrBorg” helped to tens of thousands of debtors to find ways to wipe off their debt: from writing-off a half of the debt amount to credit offers for the priod of up to 8 years (and more).
It’s possible because banks operate within the bounds established by the regulatory authority National Bank of Ukraine, and cannot, for example, release a part of the debt, fine or penalty. That’s why it’s a collection company with which it’s easier and more convenient for a borrower to cooperate with.