the difficulty for credit management companies is the working year itself

Debt management and collection company “Legal Balance” earned 6.8 million euros last year. EUR income – almost 3 million. EUR more than last year. As payment terms lengthen, the number of debtors grows and bankruptcies increase, the company, as shown in its annual financial report, is growing both at home and in the still relatively new Latvian market, the press release says.

According to the head of the company, Mariaus Šlepetis, the faster growth than before was due to investments (purchase of debt portfolios) and the anti-cyclical nature of the activity – as debts grow, the work for credit management companies increases, and the demand for services increases.

The statistics speak for themselves – in 2021 record 700 bankruptcies, in 2022 there will be 1200, most of them were real estate companies. This year, over 100 companies went bankrupt in January alone.

“Wholesale and retail trade, service and catering, logistics, telecommunications and utility companies are already facing insolvency problems or a long line of debtors. This trend will not change in the near future, so it is advisable for companies in these sectors to come to an agreement with the debtors as soon as possible and to recover the money before they themselves face difficulties.

Today, the average debt of a Lithuanian resident reaches 3-3.5 thousand. euros. More than 50 percent these debts consist of unsecured housing loans, leasing and consumer loans”, calculates M. Šlepetis.

is gaining momentum in Latvia

Together, Legal Balance groups operating in Lithuania and Latvia, in 2022 income according to unaudited data amounted to 6.8 million EUR, when in 2021 exceeded 4 million.

in 2022 The income of “Legal Balance” in Lithuania reached almost 5.3 million. Eur, the Latvian market generated almost 1.5 million. euro income. In 2021, the turnover in Lithuania amounted to 3.4 million. Eur, and in Latvia – 660 thousand euros.

The company’s EBITDA last year compared to 2021 increased from 1.6 million EUR to slightly more than 2.9 million. Eur. in 2021 EBITDA in Latvia amounted to 163 thousand. EUR, in Lithuania – 1.5 million. Eur. in 2022 In Latvia – 450 thousand. EUR, in Lithuania – 2.5 million. Eur.

The company has a total of 19 employees in Latvia. In Lithuania – 43.

“Legal Balance” started operating in Latvia in 2018, but according to M. Šlepetis, the beginning was slow.

“We are recording a faster growth of indicators in the neighboring country from 2021. autumn 2022 can be called a breakthrough year. In Latvia, we also successfully and sustainably invest and buy debt portfolios, mostly from the financial sector. We pay a lot of attention to this area in all markets where we develop our business and have long-term plans,” says the credit management expert.

Last year, investments in debt portfolios in the neighboring country reached almost 1.2 million. EUR (in Lithuania – EUR 4.7 million).

“From the already acquired portfolios, today we have claim rights to almost 50 million. Eur. in Lithuania and approximately 20 million Eur in Latvia”, explains Nerdas Sangavičius, head of finance at Legal Balance.

© DELFI / Šarūnas Mazeika

The amounts of consumer credits are also growing

M. Šlepetis claims to observe another trend – the number of private individuals taking out consumer loans is increasing. in 2022 50% of them were issued in Lithuania. more than in 2021. In addition, the term for which loans are taken increases, the amounts grow.

in 2021 the average credit amount was EUR 1,000, last year it was already EUR 1,500. Unfortunately, a significant number of people who have taken out this type of credit are unable to pay off their obligations on time.

At the beginning of this year, the mobile application ESKOLOS was launched. “We believe that this product will increase the share of debt repayments and cash flows in a broad sense by at least 20-30 percent,” M. Šlepetis is convinced.

Currently, Legal Balance manages 20 million people through the electronic platform. EUR debt portfolio. It has almost 14.8 million Debts of natural persons amount to EUR 5.3 million. Eur – legal. The largest part of the portfolio consists of unsecured loans (over EUR 10.1 million), non-payment for goods and services provided (more than EUR 4.6 million), unpaid damages (about EUR 4.7 million) and unpaid wages (almost EUR 0.7 million). The average debt amounts to EUR 3,882.

The plan for this year and next year

This year, Legal Balance plans to increase its turnover to 8-10 million. Eur. The main focus will continue to be on increasing debt portfolios. Also – for the development of new services, implementation of artificial intelligence and geographical expansion.

Next year, in the portfolio segment, the company plans to enter the secured loan market and buy more secured loans. It also promises to increase turnover in the existing unsecured loan segment.

With the “” platform, the company intends to enter the automobile, aviation and labor dispute sectors.

“We want to expand our activities and open a company in one more foreign market, but we will be able to tell you more about it later, when we have made a more concrete plan. The main goal is to ensure an attractive return for investors and shareholders”, says M. Šlepetis.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.