Čzech debtors have learned from the previous economic crisis and, despite the global pandemic, responsibly repaid their overdue obligations last year beyond expectations. Although the average amount paid decreased by just under 200 CZK year-on-year, payment morale improved compared to previous years, according to the year-long data from the EOS KSI debt collection agency.
In the pandemic-affected year of 2020, the average amount collected from Czech debtors decreased by 194 CZK to 2,561 CZK. However, this amount remained significantly above the 2018 average and nearly matched the 2019 average in the last quarter of the previous year. Many debtors acted responsibly and attempted to settle overdue obligations even during the second wave. Although it represents the first year-on-year decrease since 2015, when the average amount paid from outstanding debts gradually increased, the magnitude of the decline is small compared to experts' expectations.
EOS KSI's findings suggest that uncertainty doesn't ease the situation for debtors, but it temporarily worked in their favor last year. The number of new repayment agreements in 2020 increased to 39.25%, a 7.3 percentage point increase year-on-year. Concurrently, the rate of adhering to repayment commitments (known as the "kept rate") also increased to 38%, a substantial 46% rise compared to the average of the years 2013-2019.
"Last year's overall figures can be interpreted as indicating that people who wanted to come to an agreement also intended to pay and made realistic assessments of their capabilities. Another factor could have been the postponement of repayment obligations during the so-called moratorium, where debtors, due to higher available funds, could focus on repaying earlier obligations without disadvantaging themselves as debtors," commented Vladimír Vachel, the managing director of the EOS KSI debt collection agency, on the statistics.
According to Vachel, the current rise in new commitments and the adherence rate is unusual. He attributes this to the inability to spend on travel, culture, and other common leisure expenses. "The growth in both indicators is evidence of responsible behavior. Czech debtors' approach has been significantly influenced by historical experience from the previous economic crisis, which led to increased debts and subsequent debt problems, enforcement, and insolvency. The more responsible ones are trying to avoid that," he adds. The EOS KSI debt collection agency also implemented new collection processes and negotiated more realistic agreements in the past year, albeit often with lower values.
From available sources, it appears that approximately 90% of those who requested a deferral were able to restart repayments after the moratorium ended. According to experts, this suggests that they managed to deal with other obligations in the meantime, allowing them to resume regular repayments on these deferred loans.
EOS KSI Czech Republic, s.r.o., is part of a multinational network of 50 companies operating in more than 25 countries, specializing in financial services and all aspects of debt collection. The EOS Group was founded in 1974 and is known for its reliability and high-quality services. The company's clients include major banks, insurance companies, leasing companies, consumer credit providers, as well as companies in the telecommunications, wholesale, and retail sectors. The group's headquarters are in Hamburg, Germany. Apart from Germany, the EOS Group is directly represented in Belgium, Bosnia and Herzegovina, Bulgaria, Montenegro, the Czech Republic, Denmark, France, Croatia, Ireland, Canada, Hungary, Macedonia, the Netherlands, Poland, Austria, Romania, Russia, Greece, Slovakia, Slovenia, the United States, Serbia, Spain, Switzerland, and the United Kingdom. Indirectly, it operates in another 150 countries worldwide.