The market for debt collection agencies - France

A debt collection agency is an intermediary between a company or an individual and a customer in debt or unpaid status, whose main role is to obtain payment from the debtor. It's a delicate and strategic business, requiring skills in customer relationship management andfinancial risk analysis. Debt collection is a strictly regulated activity, governed by legal rules and open to competition, which means that a number of different players are involved in this fast-moving market, such as judicial commissioners. The global market for collection agencies is set to grow at an average annual rate of 2.9% until 2033. What's more, this is a sector accelerated by new technologies that reduce process costs while increasing efficiency. The automation of dunning and payment procedures, as well as the use of artificial intelligence, play a central role in improving receivables management, in particular by enabling fine segmentation of debtors, making collection efforts more targeted and effective. In France, the number of collection agencies has been steadily shrinking, while the number of employees has risen, underlining a trend towards the enrichment of larger agencies that can afford the cost of acquiring new technologies, rather than smaller agencies. In addition, collection agency sales are expected to grow by 19% between 2020 and 2024. Collection agencies depend on payment deadlines for businesses, as well as household overindebtedness. As a resultfterslightly increased in 2020during the health crisisand supplier payment times for companies excluding microenterprises, will fall by 2 days in 2022. However,"major delays are increasing significantly in France. Today, 8.3% of companies aremore than 30 days in arrears. In France, collection agencies have the advantage of preserving the image of the company that calls on them , by adapting their approach to the debtor's profile and always starting with an amicable procedure, which in most cases is sufficient to obtain payment. Their image is less tarnished than that of bailiffs, who use both judicial and amicable collection methods. The double advantage for collection agency customers is that bailiffs' fees are regulated by law, and therefore not open to competition.