Collectius acquires more than $800 million of non-performing loans in Vietnam

Collectius, a leading restructuring partner for financial institutions in Asia, acquired its first portfolios in Vietnam since entering the market at the end of last year, securing more than $800 million of non-performing loans (NPL) from a local commercial bank.

The deal, which includes a combination of credit cards and personal loans, represents the largest single acquisition made by Collectius to date and signifies a growing need for debt restructuring solutions in the country as loan defaults become more common.

The NPLs were a joint acquisition by Collectius and the International Finance Corporation (IFC), a member of the World Bank Group.

Both parties partnered in 2020 to launch the $60 million Distressed Asset Recovery Platform Programme that focuses on the acquisition and resolution of distressed assets across emerging markets. This programme helped many customers across the region meet their financial obligations and regain creditworthiness. IFC is also a minority equity shareholder in Collectius.

In addition, Collectius recently acquired NPL portfolios from a leading super app in Southeast Asia, as part of a regional deal that covers five countries including Vietnam.

Through these NPLs acquisitions, Collectius now serves more than 195,000 customers in Vietnam and is in discussions with several financial institutions to acquire more portfolios.

Banks in Vietnam are expected to see rapid credit growth this year as the economy reopens. The ratio of non-performing loans in the country is likely to increase as the regulatory forbearance to restructure loans is set to expire. The loan moratorium issued by the State Bank of Vietnam, which allows banks to extend their debt repayment terms to customers, will come to an end on June 30.

"Vietnam is one of the fastest-growing economies in the world and the banking system, alongside the central bank, is accelerating the process of handling and restructuring bad debt. As a leading fintech pioneer in unsecured debt purchases, we are excited to work with partners in the country to contribute to a well-functioning NPL market that is key to a healthy banking sector," said Gustav Eriksson, CEO at Collectius.

Entrusted by major banks and financial institutions, Collectius continues to reinforce its position as the preferred debt purchaser of consumer NPLs in Southeast Asia, employing technology and digital-led strategies to build additional servicing capacity.

It employs what it calls the 'Collectius Way of Collections' – one that is rooted in ethics, compliance with local and international regulations, and a personalised and tailored approach.

Collectius also ensures that all customers who undergo its processes benefit from greater financial literacy by gaining knowledge about the accumulation of interest and the different fees that banks and creditors add to an NPL, while guiding them on the journey to becoming debt-free.

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