Azerbaijan, Baku, 24 April / Trend I.Khalilova /
Azerbaijan's only collection agency BOA is ready to buy back debt on overdue bank loans, however, not a single deal has been made over the period of the agency's activity [eight months], the agency's director Samir Mustafayev told Trend.
"We have appealed to the banks with a proposal to buy back their credit debt, however, no such deal was concluded, since the banks are not ready for such cooperation. In the case of purchase of the debt, each overdue loan will need to be carefully evaluated within at least two months," Mustafayev said.
Currently, he said, the agency is working with two major banks and is in talks with five banks.
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. 43 percent of this amount has already been returned.
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. The agency takes loans with a period of delay of more than three to five years. Overall, the rates range from 20 percent to 50 percent depending on the complexity of the case. One portfolio may have a lot of positions, therefore, the interest rates are respectively different.
"Upon the repayment of the debt, the agency transfers the funds to the bank on the same day, and in the case of purchasing the debt, the returned funds remain with the BOA," Mustafayev said.
According to international practice, the debt can be bought for the price up to 50 percent of the credit debt, which means that the transaction concluded at a bargain price. According to the head of the agency, the normal transaction price is 25-30 percent of the amount of the debt.
Due to the fact that the agency has not yet reached a profit, buying the debt is possible by means of the founders. "Only after eight months of activity we equalized income and expenses, and the profit is planned to be reached the next year," 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 24 is 0.7845 AZN / USD.