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The year 2007 was marked by the boom of volume of loans in every sphere of credit facilities – mortgage, cars, and simply cash. However, we currently face a different trend: the majority of banks either have been liquidated, or undergo the winding-up process. Thus, as of 2007, there were 175 fully functioning banking establishments, comparing to 2017 where there are only 90 banking institutions in Ukraine. For this purpose, a topical question arises: What will happen to the debts which are on the books of the banks undergoing the process of winding-up? In Ukraine, the problem of debts due to banks undergoing the process of winding-up is addressed directly by the Deposit Guarantee Fund (hereinafter referred to as DGF). Thus, according to the officially available information provided by DGF, DGF engaged 11 debt collection agencies, to which, since this April, it handed over the total loan portfolio for the amount of over UAH one million.

COO of Creditexpress Ukraine LLC made a comment concerning the mode of cooperation with DGF:

“Creditexpress Ukraine LLC maintains close cooperation with DGF. Early in 2017, we were contracted to handle the loan portfolio for banks where temporary administration was introduced, and we can give our accounts of the portfolio.”

“If we analyze composition of the borrowers in terms of ‘age’, the percentage of the ‘youngest’ borrowers, under 30, made up 14% of the total number of cases. The average age of the potential defaulter is 31-40 – economically active population of the state, and 51+, which is 31% of citizens among the total number of borrowers. The statistical data in terms of ‘debtor’s age’ emphasize that 51+ borrowers do not always understand details of the agreement offered, and, consequently, are unable to give their own correct assessment of their risks and develop their profit ratio.”

“In the course of our work, we segmented insolvent borrowers according to the region of their residence, overdue period and reasons of debt occurrence. Following the assessment of reasons for refusal from payment, we identified several categories: 18% – their profit fell down, they are unable to cope with their debt burden; 15% – the debtor is in the region of the anti-terrorist operation (ATO); 14% – ‘forgot’ their debt, primarily, debts with small overdue period; 12% – did not conclude any contract and had never heard of their debt before; 11% – lost their jobs, have no money; 10% – dissatisfied with high penalties and fines charged; 9% – the debtor died, and the relatives failed to inform the bank.”

“Using the acquired data, we identify what kind of solution for the current problem may be offered to the debtor. Borrowers in poor financial situation, may repay their loans with discount by the individual schedule and in smaller instalments based on the arrangements between our company and DGF. With borrowers from ATO area, who stay in the peaceful territory, we conduct personal negotiations/meetings, where the major emphasis is placed on capabilities, requests, and suggestions of the borrower in relation to the debt repayment. As an incentive for the debtors who do not express their willingness to repay their debts due to the bank’s bankruptcy, we provide free legal consulting and explain major provisions of the Ukrainian legislation.”

“Regions of Ukraine who repay their debts to the fullest extent include the West, and the North. Borrowers residing in these regions, over the period of our cooperation with them, paid 27.92% and 29.2%, respectively, of the total of paid debts.”

Rating of regions according to the repaid debts

“The Central region is 4.22% behind the Western region; almost one fourth of borrowers who fulfilled their obligations towards their Creditor reside in this region.”

“Unfortunately, the worst numbers as to repaid debts were demonstrated by such Oblasts as Odesa, Mykolaiv, and Kherson. The numbers for the Eastern region were affected by debt repayment by residents of Donetsk and Lugansk Oblasts. The percentage of debts repaid by borrowers in every Oblast does not exceed 1.5%. Such results are associated with the region’s political and economic situation. Failure to repay their debts by some borrowers is associated with the lack of their physical ability to repay the debt.”

“Major banks are usually slow and ‘top-down’. And it is virtually impossible to make arrangements with them concerning restructuring for small consumer loans on a case-by-case basis, particularly if the bank undergoes the process of winding-up. Debt collection agencies show more flexibility and are willing to hold a dialogue with every borrower individually. This is the very reason why, following the first months of cooperation with DGF, our Company became the leader among the rest of the agencies who maintain cooperation with DGF.”

Operations and performance of Creditexpress Ukraine LLC are carefully controlled by employees of the Deposit Guarantee Fund.

COO of Creditexpress Ukraine LLC states: “The portfolio provided by the Fund is relatively difficult to manage, as the register includes loans from ATO area, car loans in USD which had been obtained before 2008 financial crisis when the exchange rate reached entirely different limits. We are certain that the European practice of collecting troubled debts will enable employees of Creditexpress Ukraine LLC to help borrowers repay their debts toward DGF. Ukraine is consistently moving toward Europe – and responsible attitude to assumed obligations is an integral part of the European values.”


Should you have further questions on our company or need information about your case, on the management or purchase of debts, do not hesitate to contact our colleagues or the Client Service.