Industry Analysis & Industry Trends
Given the nature of their business, debt collection agencies should have performed well over the past several years, but this has not been the case. Industry revenue contracted in each of the four years from 2007-08 through 2010-11, causing profits to tumble. After a long period of expansion, credit growth came to a halt in 2008, with the onset of the financial crisis. Demand for debt collection services rose strongly as the economy weakened, but collection agencies struggled to collect on these debts as debtors became less willing or able to pay their accounts. The drop in debt recovery rates severely slowed cash flows for debt collectors, while many operational costs remained fixed, causing profitability to slide accordingly... purchase to read more
Industry Report - Industry Key Buyers Chapter
The industry is small and fragmented, with just over 450 establishments this year. While there are several very large debt collection agencies that have financial backing from private equity funds and financial institutions, the industry also comprises many small operators, which have struggled to survive the past three years. Despite the high volume of consumer and commercial debt, recovery rates fell sharply and the costs of debt collection surged, forcing many collection agencies to exit the industry as their cash flows dried up. This contributed to an increase in concentration, as about 10.4 businesses dropped out of the industry per year between 2007-08 and 2012-13... purchase to read more