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IFC and Collectius launch the first distressed asset recovery platform to address the impacts of COVID-19 on the banking sector and consumer finance in East Asia Pacific

Singapore, September 16, 2020 —Thanks to this new regional platform, more than 100,000 businesses and households in East Asia Pacific are expected to regain access to formal credit by 2026. Launched by IFC, a member of the World Bank Group, and Collectius, a pan-Asian pioneer in unsecured debt purchases, this platform is dedicated to acquiring and resolving unsecured debt in Indonesia, the Philippines, Malaysia, Thailand, and in the near future, Vietnam. This will help unlock capital to support fresh lending in the region, helping post COVID-19 recovery and future economic growth.
The $60 million investment and resolution platform will significantly contribute to financial stability in the region, allowing regional banks to deal effectively with their non-performing loans (NPLs) and focus on renewed lending. Further, the platform will help thousands of defaulted debtors meet their financial obligations and regain creditworthiness, thereby securing livelihoods and protecting jobs. This is IFC’s first crisis response Distressed Asset Recovery Program (DARP) investment to address the early impacts of COVID-19 on the banking sector and consumer finance in EAP.
Gustav A. Eriksson, Founder and CEO, Collectius, said: “This is a momentous milestone in our journey as a company, and we are extremely proud to partner with IFC. The partnership strengthens our influence in the market and the capital increase means we can further support banks and finance companies that want to sell their non-performing loan portfolios. Most importantly, the new platform allows us to not only assist individuals struggling with debt, but also move the industry toward higher standards in ethics and regulations.”
IFC has also become minority equity shareholder in Collectius to help the company build additional servicing capacity and further strengthen its position as a trusted partner to manage unsecured NPLs for leading banks and financial institutions in the region.
“Given the COVID-19 crisis, high levels of non-performing loans can become a major problem in emerging economies, stalling credit flow and impeding growth. So, resolving NPLs is even more critical to maintain efficiency in intermediation for the financial sector,” said Rosy Khanna, FIG Industry Director for Asia and Pacific, IFC. Khanna added, “As NPLs are resolved, economic recovery can pick up pace, helping financial institutions in Asia to unlock their capital and encourage new lending to local households and businesses.”
This investment is part of IFC’s strategy to build dynamic secondary debt resolution markets. The IFC and Collectius NPL platform is expected to serve as a model for other investors via demonstration and replication channels, thereby increasing market competitiveness and integration.
IFC’s DARP program was launched in 2009 to address the significant increase in NPLs after the 2008/2009 global financial crisis. Since its inception, DARP has grown to a total commitment of $7.4 billion globally, including commitments of $2.6 billion from IFC’s own account and co-investments from third-party investors of $4.8 billion, making IFC a market leader in distressed assets resolution in emerging markets.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org .
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About Collectius
Collectius is a trusted restructuring partner to banks and financial institutions in Asia with operations in Indonesia, Philippines, Singapore, Malaysia, and Thailand. Its business is to purchase portfolios of non-performing consumer loans and recover them by supporting its customers to become debt-free using the “Collectius way of collection.” The company is offering a customer-centric approach and operates a data-driven collection platform powered by machine learning and digital first communication. Collectius is bringing foreign direct investment, providing employment opportunities and high-quality training of its staff. Collectius is majority-owned by the two founders Gustav A. Eriksson and Ivar Bjorklund, with the remaining owned by Stena AB and Formica Capital. Stena is one of the largest family-owned companies in Sweden having global operations in Ferry Operations, Offshore Drilling, Shipping, Property, Finance and New Business. Formica is an investment company focused on impact investing and is a related company to Stena family office.
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