The debut issue of ID Collect worth 400 million rubles was placed in a few hours
ID Collect agency (part of international fintech group IDF Eurasia) has reported the successful outcome of a 400m ruble bond issue and high interest from professional investors — the order book was completed in one trading day on 10 August. The nominal value of one paper amounted to 1,000 rubles. The bonds will mature in 3 years, there is no offer, and the coupon rate is 12%.
The raised financing will be used to develop the business, introduce new technological solutions to improve the quality of business and purchase portfolios. In this way the company simultaneously accomplishes two important tasks. The first one is diversification of funding sources — bonds are added to equity, direct investment loans and credit lines.
The second task is socially oriented. As its global mission, ID Collect sees healing the country’s financial system by helping financial institutions «clear their balance sheets» of overdue debt, while improving financial literacy and reducing the debtor’s own leverage. In the absence of common practice among lenders to support and accompany those who have become debtors due to objective external factors, many are left alone facing the problem. Using an individual approach, ID Collect helps them to deal with the situation in a competent and comfortable manner by drawing up personal repayment terms, convenient repayment schedules, offering discounts, etc. As a result, debtors learn to control and plan their budgets more carefully and take financial matters and borrowing money in particular more responsibly. Accordingly, in order to maximize this beneficial effect, we need to work with as large a portfolio as possible — this is why the funding received from the bond issue will be used to purchase new debt portfolios.
The organizer of the issue is Freedom Finance, a large and respected player on the market. The mere fact of working with such a high level partner proves that he is sympathetic to our views, methodology and mission as a whole, and signifies the reliability and efficiency of us as a company. This gives ID Collect the opportunity to successfully implement the direction of social responsibility, while remaining a financially stable, promising and predictable business.
Alexandr Vassilyev, CEO of ID Collect:
«This was the company’s debut issue, and it is the second time in the Russian public debt market that a representative of the collection industry has placed securities. ID Collect is a relatively young company, with a history dating back to 2017. Therefore, the bond offering can be called a particularly significant and indicative stage in its development — entering the debt capital market is always the prerogative of a business that has already proven its viability, efficiency, transparency and reliability, as well as the financial and human resources required directly for the offering».
Sergey Nosov, Deputy CEO, Freedom Finance IC:
«ID Collect’s strategic goal is to take a leading position among collection companies in the Russian Federation. We believe that collection activities can be correct and transparent, and the appearance on this market of honest and conscientious players, such as ID Collect can increase trust in such organizations. Considering the dynamics of the company’s financial indicators, we believe that the goal set by the issuer is quite attainable, and a successful bond placement will bring us closer to it.
ID Collect’s distinctive feature is its modern approach. The company makes extensive use of advanced technologies, including artificial intelligence, Data Science and proprietary IT developments, to continuously improve and optimize the collection process — including predicting debt recovery based on scoring models and assessing the profitability of portfolios before they are purchased in terms of achieving target yields. Overall, the technology approach also allows us to minimize «manual» labor and focus the freed-up resources on business development and priority tasks.
By implementing advanced technology, ID Collect has demonstrated a high rate of business growth, providing a competitive advantage by automating the forensic collection process. Operational efficiency indicators (decreasing collection costs and increasing debt collection) and financial results are improving every year, which is evidence of a well-developed development strategy and business processes.
ID Collect’s market share on the Russian cession market has increased more than 6 times over the past 2 years and reached around 22% at the end of June 2021, which means that the company has purchased almost one fourth of all debt portfolio offerings. Thus, in a relatively short period of work, ID Collect managed to reach annual volumes of purchased portfolios comparable to the market leaders. The company is operating in all Russian regions, performing a full range of collection activities, including support of enforcement proceedings. ID Collect is planning to continue increasing its market share with the introduction of a technological approach and automation of processes.