Ukraine to speed up debt collection
How private enforcers can collect debts faster
29 March 2021
On average, it takes State Executive Service two to three years to collect a debt. With private executors, it can be done faster.
Presently, there are 270 private executors in Ukraine. In 2020, the number of proceedings involving them increased by the factor of 2.8.
Debt recovery rate is one of the indicators determining a country’s place on the Doing Business rating. According to the World Bank data, Ukrainian debtors currently return 9 cents on a dollar, against 38.5 cents on a dollar in Europe and Central Asia.
| Month | November 2019 | December | January 2020 | February | March | April | May | June | July | August | September | October | November | December | January 2021 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Number of proceedings involving private executors | 105,036 | 107,406 | 116,929 | 127,710 | 136,033 | 150,636 | 158,662 | 170,414 | 187,240 | 200,063 | 217,975 | 236,271 | 254,670 | 278,005 | 292,607 |
Private executors emerged in 2017 as an alternative to the State Executive Service. They are tasked with enforcing the rulings of courts and other institutions, work in parallel to the SES, and use the same tools (e.g., seizure of bank accounts). However, only state executors can be involved in certain kinds of proceedings, e.g., eviction or collection in favor of government agencies.
Private executors are involved mostly in debt collection for banks and financial institutions.
| Recovery of money | 285,194 | 97.5% |
|---|---|---|
| Recovery of outstanding utility bills | 3,139 | 1.1% |
| Seizing and disposing of debtor’s property | 2,881 | 1.0% |
| Recovery of private executor’s primary compensation | 669 | 0.2% |
| Recovery of outstanding salary and other labor-related payments | 523 | 0.2% |
«The State Executive Service was bureaucratized and overloaded, and it often exceeded the time-frames set by the law. Private executors have thus become a great solution to improving the business climate in Ukraine.
Private executors show higher efficiency and better results in debt recovery because they hire as many people as they need as well as have faster decision-making and automated processes to speed up debt recovery»,
— explained Fedir Safir, a lawyer with Opendatabot.
Source: Opendatabot
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