Delay sells like hot cakes – Kommersant

At the end of April 2023, the cost of overdue debt offered for purchase by microfinance organizations increased to 17.7% of the amount of debt (+5 percentage points compared to March), the cost of bank delinquency — up to 16% (+2.5 p.p.) . Buyers have accumulated liquidity, and they are ready to actively buy portfolios in the face of growing debt collection. In addition, lenders themselves have become more active in the cession market, buying overdue portfolios of other players and are ready to develop this marginal line of business.

According to the Debex online auction for the sale of overdue debts, in April 2023, the value of overdue debts offered by creditors on electronic trading platforms for sale under the cession scheme amounted to 17.7% of the principal amount (PLO) for MFIs and 16% of OSS for banks.

The April increase in delinquency prices in Debex is associated with an increase in liquidity from buyers and an increase in debt collection. According to the results of the first quarter of 2023, the KPP indicator (kept to promise, the conversion of the debtor’s promise to make a payment into actual payment) reached the maximum value of 20% since 2022 in the cession portfolio (banks plus MFOs), confirm the data of ID Collect, a service for recovering bad debts. “The growth in the cost of the cession of banks and MFOs is indeed noticeable. The upward dynamics has been observed since the beginning of March and continues now,” says Alexander Vasilyev, CEO of ID Collect. “During the period of downtime, buyers, many of whom suspended purchases last year, have accumulated liquidity,” he explains. return to their usual shopping volumes. Against the backdrop of renewed demand, competition for high-quality portfolios and, accordingly, prices for them is growing, continues Mr. Vasiliev.

However, it is not worth waiting for further price growth in the delay market. At least not in all its segments. According to Elman Mehdiyev, president of SRO NAPCA, the price will vary within 10-15% during the year. The price will be affected by the term of delay, and contact, and completeness of the dossier, and the general demand for debt portfolios from investors, he lists. In the microfinance delinquency segment, if there is growth, it will be local (in a number of MFIs). “Further, most likely, prices will not go up, because overheating of the market is not beneficial to anyone,” says Debex CEO Sasha Danilov. litigation portfolios of MFOs began to appear on the market.” In the banking cession segment, prices will continue to rise, as a number of banks have not yet put up debts for sale, he describes the situation on the market.

Another trend is the steady interest of large buyers from among banks in the problem portfolios of other players, Mr. Vasilyev notes. “According to my estimates, at least 5% of the debt of MFOs put up for sale in March-April was bought out by banks. Troubled portfolios may be of interest to lenders with a historically strong internal collection service that can show high collections on acquired portfolios in a limited time frame,” he says. In this configuration, the acquisition of a cession by banks is logical and allows the development of a non-core, but high-margin business (see Kommersant of February 6, February 17). The interlocutors of Kommersant in the collection market note that there was no such activity of banks and MFIs on the cession market before, probably creditors want to take part of this market from collectors and make it one of the sources of permanent income.

Polina Trifonova