Finland’s third largest debt collection company OK Perintä has increasingly begun to purchase receivables, or so called non-performing loans, from other companies. The business took off after 2012, when OK Perintä was aquired by the Norwegian B2Holding Group.
“Trading with non-performing loans is fairly common in the financial sector. However, there are many other sectors where companies do not even know that it is possible to sell your receivables,” says Kari Ahlström, who became OK Perintä’s new CEO in spring 2015.
Ahlström himself is a true pioneer in the trade with non-performing loans in Finland. He was previously CEO of Aktiv Hansa, who purchased the problem debts from the bad bank Arsenal in 2000. This was among the first non-performing loan portfolio purchases ever made in Finland.
Trading with non-performing loans has positive side effects for society and the economy.
“For the national economy, it is good because it gets the money rolling. Companies receive fresh capital, which they can then invest in their core business,” says Ahlström.
Another thing that speaks for portfolio trading is that a specialised debt collection company has far better opportunities to collect the debts, compared to a company who does not have debt collecting as its core business.
“The statutory maximum tariffs for debt collection are on such a low level that you have to have really effective systems to gain profitability. This is a big numbers game,” Ahlström says.
In order to further streamline its processes, OK Perintä has recently invested heavily in developing its rating and scoring models. Statistical analyses have been carried out, which have revealed universal trends that predict debtor customer behaviour. Due to the continually evolving analytics, the company can tailor the collection process correctly right from the start, thus avoiding unnecessary steps in the process.
“In addition, precise analytics also enables us to evaluate the non-performing loans portfolios that we purchase more accurately,” Ahlström points out.
Business sector: Account receivables management, debt portfolio management, financial and administrative services
Turnover: €39 million