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B2B Credit Forum 2021 – conference summary

How to handle incoming wave on non-performing loans among SME and self-employed in Spain?

Last week during three days VSoft took part in the one of the biggest event in Spain, B2B Credit Forum 2021, dedicated to risk, fraud and collection management in the context of SME. This year’s event was particularly crucial and interesting because it was focused on huge amount of unpaid debt among SME and self-employed and bankruptcy that will boost once the period of moratorium will end.

So what amount of credit are we talking about - 131 billion euros that have been granted to SMEs and self-employed (according of the Bank of Spain) as a result of the COVID-19. In the coming months with the end of moratoriums and deficiencies, the increase in debt and bankruptcy in Spain among SME and self-employed is expected to reach the magnitude never seen before.

Risk management and fraud control are key elements for the recovery of SME credit, a situation inextricably linked to the possible insolvency of companies. For that reason, a lot of debates were focused on the subject of bankruptcy and new law in this context. During the day two the attention was paid to the bankruptcy pre-pack, an element of jurisprudential creation not expressly regulated in Spain and consisting of the judicial appointment of an independent expert in order to lead the negotiations for the sale of a production unit in a pre-bankruptcy period. As the experts we emphasizing prepack could be a very good tool for helping companies and especially very useful in saving jobs.

The best practices in management and assessment of the actives of the company were main subjects discussed during day one. Making the best decision in the valuation, management and settlement of company is of vital importance for the creditor. What are the best practices? As one of the participant mentioned in his bank, when evaluating the company, they look at it from 5 main points of view – what is a company, who is behind, what industry it is in, how is its business now and how it was before the COVID-19. Bank tries to understand needs of their clients to apply the best strategy in its debt management.

How about the strategy of financial institutions to support with their service SME and self-employed? How are they prepared and what strategy will they use? One of the participant mentioned that there are 3 clue elements that need to exist in order to give full support to these companies – 1 – engine for mass analysis, 2 – team of experts who know each business and 3- technology.

Last but not least is technology. Without the doubt digitalization and automatization is a clue element of debt and risk management. The possibility of access to many sources of data and then analyze it, is a very important element that supports decision making and risk management. As mentioned one of the participant of debate the open banking gives huge opportunity and support in the area of debt recovery and restructuration.

To sum – up to be able to effectively handle massive amount of incoming NLP and help SME and self-employed overcome this tough moment, there need to be great synergy between adequate law, expert knowledge and technology.

Anna Kowalik, International Business Development Manager at VSoft
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VSoft Collection is a solution dedicated to overdue payments monitoring and debt collection, both for the portfolio of primary creditors and those managed by debt collection agencies. The solution supports business processes in the assertion of claims both from individual and business clients, enables monitoring of all types of liabilities including loan, lease, trade receivables, subscriptions, overdue contributions.