Industry Analysis & Industry Trends
The Debt Collection industry typically thrives when the economy is weak, as this can lead to households defaulting on loans and trigger a rise in business bankruptcies. Strong economic conditions, however, can have the opposite effect on the industry. This is due to efforts by households and businesses to pay down debt and boost savings, and the tightening of lending practices, which result in better loans with less likelihood of default. Industry revenue is projected to display strong growth of 4.7% during 2015-16, due to higher unemployment levels and increased household debt as a proportion of assets.
While some parts of the Australian economy benefited from the mining boom over the past five years, much of the economy struggled due to challenging conditions... purchase to read more
Industry Report - Industry Analysis Chapter
Australia has operated as a two-speed economy over the past five years, as the mining sector expanded and many other sectors struggled to grow. These factors contributed to positive results for the Debt Collection industry. Debt collection is one of the few industries that generally benefits from the tightening of economic conditions and the accompanying rises in unemployment, loan defaults and bankruptcies. That said, it has not all been smooth sailing for the industry, as slower economic growth in some years tended to tighten corporate budgets for debt recovery.
Type of debt owned
Industry operators use two main business models: contingent collections and debt portfolio collections. Contingent collection agencies collect debt on behalf of the original creditor... purchase to read more