Azerbaijan, Baku, 12 April / Trend I.Khalilova /
Azerbaijan's only collection agency, BOA, is in talks with five banks for the conclusion of the agreement on the return of credit debt, the agency director Samir Mustafayev told Trend.
"Today, we are working with two major banks and in talks with five others. Besides the banks, we work with five or six shops selling computer hardware and with two or three individuals indebted to each other," Mustafaev said.
The debt has to be certified on a contractual basis or by a notary, otherwise it is considered illegal, the head of the BOA said.
At present the total portfolio of outstanding credit debt transferred to the agency by two banks and shops selling goods on credit as well as individuals, amounts to about five million manat although 43 per cent of this amount has been returned.
According to the Central Bank of Azerbaijan, of the total loan portfolio of banks operating in the country, overdue loans amounted to 748.8 million manat (5.9 per cent) versus 633.8 million manat in early 2012. Statistics of overdue loans does not include similar loans of the Aqrarkredit non-bank credit organisation. In 2012, outstanding loans increased by 18.14 per cent.
The range of credit debt on matters transferred to the agency varies from 400 manat (credit for purchase of a phone) to 0.5 million manat. The number of customers is approximately 200-300 from each bank and in general, BOA has to deal with about 1000 debtors.
"We have just established technical sales, but still afraid to accept too many customers and a weighty portfolio," Mustafayev said.
Commission for services rendered by the BOA vary depending on the period of delay.
"We take those loans with a period of delay of more than three to five years. Overall, the rates range from 20 per cent to 50 per cent depending on the complexity of the case. One portfolio may have a lot of positions, therefore the interest rates respectively, are different," Mustafaev said.
The agency, he said, while taking action against debtors who are in the country as in this case, the probability of repayment is high.
"For the debtor not to leave the country, immediately after determining his location, all possible routes of output abroad are closed which is possible on the basis of a court decision. This is a very effective method as all those who are faced with this situation immediately repay their debts the very next day. Interestingly, they do not have any financial problems. They are just not willing to cover the debt," the head of the agency said.
In general he said there are different methods of repayment and sometimes it's incumbent on the guarantors. If the collector is unable to repay the debt, lawyers start the outsourcing. Collectors again join the process following a trial and along with the bailiffs complete the procedure of debt repayment on site.
"In a civilised world, collection services are a very effective tool for releasing the banks from excessive spending," the head of the agency said.
Repayment in his opinion requires more effort and for this only one bank must have at least 20 people. In addition, the operation of the banking system is also not suitable for the implementation of debt collection as it is provides for a visit to the debtor at night and even early morning. In addition, these activities such as staff maintenance and renting a separate room lead to additional expenditures.
The agency's personnel now consist of 30 who completely cover the existing portfolio.
"In the case of new agreements with the banks, the number of agency workers needs to be increased. We foresaw this and the office space is now 600 square metres which allows for increasing the staff," Mustafayev said.
The BOA Ltd., collection agency was registered by the Ministry of Taxation on December 19, 2011 and begun its work eight months ago.
The official exchange rate on April 12 is 0.7845 AZN / USD.