Welcome to our monthly blog post on the cash recovered in each stage of the collection process. We have tried to assign all recovery payments to a specific stage that was set closest to the payment date. Whilst this approach is not always correct in the case where recovery stages are not promptly updated, it gives a very good overview of the drivers behind recovery.
*Data for period from 1/10/2017 to 31/10/2017
Why is this important?
When looking at the table above, it shows how effective each stage of the process is at recovering cash owed to investors and can help you understand why some stages are more effective than others. If you haven’t already read our previous posts on the ‘3-step collection and recovery process’ and ‘A snapshot of the recovery process stages, where do the numbers currently stand?’, then we would recommend that you check them out first.
Why does the table show the largest amount of cash recovered in Estonia in the ‘Default & Court’ stage?
First three sub stages show more cash recovered in Estonia than Spain, Finland and Slovakia mostly because the total amount of loans in Estonia is higher than in Finland and Slovakia. However, this is also because of the success of the DCA’s in Estonia. In the future, we plan to have all cases automatically filed with the courts to improve the speed of the overall recoveries. In case the DCA’s are already working on a case and are delivering value we will continue to work with them. As it stands, only cases in Finland are automatically filed with the courts and this is why it shows the largest amount of cash recovered for Finnish loans at the bailiff stage.
Why is the bailiff stage crucial in the recovery process?
If you direct your attention the bailiff stage, it’s visible that once the bailiff has the ability to freeze the borrower’s income and assets this makes a significant impact on the amount of cash recovered. Ultimately, we aim to proceed to this stage as quickly as possible in order to begin generating a cash flow for investors.
Once all cases can automatically be filed to the courts, we expect the cash recovered in the bailiff stage, as well as in the third sub stage of Default & Court stage, to show the largest amounts across all countries. This is important because it means that we can start to generate a cash flow in a more time-efficient way for investors.
Next month, we will do a comparison of how the cash amounts recovered have changed and why.