Summary

The global debt collection agency market has experienced steady growth, projected to expand at an average annual rate of 2.7% from 2023 to 2033. The COVID-19 pandemic, which triggered job losses and unpaid bills, has partly fueled this growth. The adoption of new technologies, such as automation and artificial intelligence, has also enhanced the efficiency of collection processes. Despite North America holding the largest market share at 42% in 2022, Europe is on the rise, expected to constitute 28% of the market.

In France specifically, sales for collection agencies were projected to increase by 5% from 2020 to 2021 after a decline to 813.73 million euros in 2020. Furthermore, despite a decrease in the number of collection agencies from 282 in 2012 to 269 in 2022, employee numbers have grown, indicating a shift towards larger companies better equipped with new technologies. The collection agency industry in France remains a significant player, with companies like iQera leading the market with 322 million euros in sales in 2022 and Intrum following suit with 70.5 million euros in 2021. New entrants such as Rubypayeur and GoodPayeur have also surfaced, bringing innovative solutions to the market.

French Debt Collection Market: Navigating the Interplay of Growth and Regulation

In France, we're witnessing an interesting dynamic in the debt collection industry, where demand correlates strongly with the economic aftershocks of the COVID-19 pandemic. The pandemic has led to significant job losses, triggering a ripple effect of unpaid bills and debts, subsequently increasing the needs for the services provided by debt collection agencies. With a study projecting a steady annual growth of between 2 and 3 percent from 2023 to 2033, this market is set to expand further, propelled by technological advancements which have minimized costs and enhanced efficiency. Techniques such as automated reminders, payment procedures, and the utilization of artificial intelligence to identify likely defaulters are proving to be game-changers in this industry. The adoption of these technologies is fostering a market structure where larger agencies are thriving, given they can bear the cost of new technological investments.

On domestic grounds, France has a comprehensive network of debt collection agencies, with the number of branches slightly decreasing by roughly 3 percent between 2018 and 2021, whereas the number of employees increased by approximately 8 percent. These statistics indicate a consolidation trend in the market, with sales in 2022, ranging between 850 and 900 million euros, still slightly lagging behind the peak year of 2018.

Financial institutions in France are actively extending credit, with an increase of approximately 8 percent in credit granted in September 2022 compared to a year earlier. Small and medium-sized enterprises (SMEs) are particularly active in securing loans, with SMEs recording an increase of around 30 percent in outstanding loans between 2019 and 2022. Moreover, sectors like the real estate industry dominate the lending space with over 500 billion euros in borrowed funds, suggesting a significant client base for collection agencies.

The collection agencies' competitive landscape is also affected by legislative changes, where bailiffs, now known as "commissaires de justice," hold the monopoly to collect certain types of debts. Coupled with this, start-ups are playing a transformative role, bringing novel solutions to the table, with a notable increase in the number of new businesses by close to 90 percent in the last decade. With French law capping payment terms and imposing penalties for late payments, the payment behavior is another critical factor influencing the industry.

Spectrum of Key Players in the Debt Collection Market

The landscape of the debt collection industry is populated with a diverse range of companies, from specialized debt collection agencies to financial behemoths branching into receivables management. This competitive field is led by market stalwarts who have carved out significant niches for themselves through offering a plethora of services geared towards efficient debt recovery and customer financial relationship management.

iQera stands as a formidable force in France, having emerged from the strategic merger of MSC and DSO. The company distinguishes itself through its use of cutting-edge artificial intelligence to enhance client interactions and tailor collection strategies to individual debtor profiles.

Across the border, Intrum has cemented its position as Europe's debt collection leader. The Swedish giant applies its expertise not just in debt collection but also in supporting over-indebted customers, exemplified by their Intrum Qare program which supports individuals in difficult financial situations.

Venturing into the niche of digital debt collection are recent entrants including Rubypayeur, Good Payeur, and Gcollect. These innovative startups are shaking up traditional models by integrating technology and ethical practices to increase collection effectiveness and debtor engagement.

Among those expanding their core offerings into the collections arena are insurance and financial service providers like Euler Hermes, Coface, BPCE Factor, and BNP Paribas Factor. These entities leverage their financial acumen and vast resources to provide comprehensive services that cover the entire life cycle of receivables management.

Not to be overlooked, dedicated French collection agencies such as Recocash and Agir Recouvrement continue to play a crucial role in the market, addressing the specific needs of various clients and maintaining the efficiency of the collections process. This dynamic sector thus features a range of players, each bringing unique approaches and specialized services to meet the evolving demands of debt recovery and client relations. As they navigate the intricacies of regulations and economic factors, these companies collectively contribute to sustaining a healthy credit ecosystem.

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  • Number of pages : 30 pages
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  • Last update : 04/07/2023
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Summary and extracts

1 Market overview

1.1 Definition and scope of study

A debt collection agency is an intermediary between a company or individual and a customer in debt or unpaid status, whose role is to obtain payment from the debtor. Debt collection is a regulated activity, open to competition.

According to a study published in December 2022, the global market for collection agencies will grow at an average annual rate of 2.7% between 2023 and 2033. Indeed, the COVID19 crisis has led to numerous job losses and, consequently, unpaid bills. What's more, this is a sector that has been greatly accelerated by new technologies, which reduce process costs while increasing efficiency. For example, reminder and payment procedures are automated, and artificial intelligence makes it easier to isolate profiles that will default on payments despite reminders.

Although the United States currently has the largest share of this market, this is set to decline in favor of Europe, which will account for 28% by 2022.

In France, between 2018 and 2021, the number of branches fell by 2.9%, while the number of employees rose by 8%. These figures show a trend towards larger agencies, which can afford the cost of acquiring new technologies, becoming richer, rather than smaller agencies. What's more, collection agency sales are expected to grow by 5% between 2020 and 2021.

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.

1.2 Global market

Sales in the global collection agency market are expected to reach **.* billion US dollars in **** , and to grow at a compound annual growth rate (***) of *.*% over the period ****-****.

Projected collection agency sales World, ****-****, in billions of US dollars Source: ****

Theactivity of collection agencies in a given region depends on ...

1.3 Domestic market

In France, companies operating as collection agencies are registered under NAF code ****Z.

Between **** and ****, collection agencies saw strong growth in sales, from ***.** million euros to ***.** million euros, an increase of **%. However, the period ****-**** corresponds to a period of decline for this activity, with sales dropping to ***.** million euros in ...

2 Demand analysis

2.1 Increase in corporate loans

Changes in the number of inter-company loans and the profiles of borrowing companies give an idea of the companies that could potentially find themselves in a situation of non-payment. So, as the number of business loans increases, so does the likelihood of collection agencies being called in.

A total of *,***.* billion ...

2.2 Record business start-ups, but with a slowdown in sight

Changes in the number of companies reflect changes in the activity of collection agencies. Indeed, as we saw in *.*, the more companies there are, the more likely they are to have recourse to a collection agency, and the more likely they are to have to deal with customers in debt ...

2.3 Shorter payment terms for SMEs than for large companies

In ****, average supplier payment times will be ** days of purchases (***). Overall, payment times have been falling since the early ****s. In ****, supplier payment times stood at ** days of purchases, and customer payment times at ** days of sales, a reduction of ** days of purchases and * days of sales respectively between **** and ****.

The ...

2.4 Household overindebtedness mainly affects women and low-income earners

Households may also be in arrears or unpaid and be contacted by collection agencies. The sources of unpaid debts can be multiple: repayment of a loan (***), etc.

We are going to draw up a profile of households filing for overindebtedness in France in ****. In fact, these are the same households that ...

3 Market structure

3.1 Value chain

Collection agencies generally start the procedure with an amicable phase, which consists of reminding the debtor of his unpaid debt and then, if there is no response, sending a formal notice followed by reminders. After a certain period of time, which depends on the collection agency, and in the absence of ...

3.2 Collection agencies in France

The number of collection agencies has fallen in ten years, from *** in **** to *** in ****.

number of collection agencies France, ****-****, in units Source: ****

Yet the number of employees in this sector has been rising steadily since ****, from *,*** employees that year to *,*** employees in ****. We will see later (***) that this is due ...

3.3 Competition between the profession and judicial commissioners

As of January *, ****, bailiffs are to be referred to as "commissaires de justice". Commissaires de justice are public and ministerial officers whose profession is managed by La Chambre nationale des commissaires de justice. [***]

Commissaires de justice are thus empowered by the State to collect debts. In this case, the title under ...

4 Offer analysis

4.1 The offer from the two market leaders

iQera

iQera is a French company, leader in debt collection in France. The company handles ** million cases a year. With sales of *** million euros in **** (***), iQera is also positioned to buy bad debts from banks, trying to recover more than is owed in order to make a profit...[***]

iQera is the ...

4.2 New entrants

We're going to talk here about French companies that have only recently been established (***).

Rubypayeur

Rubypayeur was created in ****, born out of the founder's bad personal experience with traditional debt firms. [***] RubyPayeur then moves on to a legal collection phase if the amicable phase has not worked within ** days. RubyPayeur has ...

4.3 Company diversification

Numerous companies involved in accounts receivable management have expanded their activities to include collections. The table below gives a non-exhaustive overview of these companies and their main activities, focusing on French groups:

5 Regulations

5.1 Legal framework for the collection agency profession

General framework

Collection companies must be declared to the Public Prosecutor. A specific bank account must be set up to receive funds collected by debtors. The debtor may choose to pay the amount owed directly to the creditor company, or to the collection agency, which is then responsible for reimbursing the ...

5.2 The evolution of French law on unpaid bills

France's tougher laws on corporate overdue debts are helping collection agencies to grow their business. Over the past few decades, the following major changes have been made:

Law on the modernization of the economy (***), which caps the maximum payment term that can be agreed between the two parties at ** days from ...

List of charts

  • Change in collection agency sales
  • Growth in the number of collection agencies
  • Change in number of employees in collection agencies
  • Projected collection agency sales
  • Breakdown of collection agency business by application
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Latest news

"Atradius expands internationally with Pro Kolekt". - 07/06/2023
  • Atradius Collections has acquired the Pro Kolekt Group, increasing its presence to 40 countries.
  • Prior to this acquisition, Atradius Collections had recently opened new offices in Dubai and Portugal.
  • Pro Kolekt provides debt collection services in several Balkan countries, including Bulgaria, Romania, Slovenia, Croatia, Serbia, Bosnia-Herzegovina and Northern Macedonia.
  • Atradius Collections offers commercial invoice collection services in 96% of the world's countries.
  • Their services include debtor management outsourcing, legal collections and third-party collections.
Intrum acquires Haya Real Estate for 140 million euros - 13/05/2023
  • Intrum has acquired 100% of Spain's Haya Real Estate for 140 million euros.
  • Intrum will increase its volume of assets under management in Spain by 11 billion euros thanks to the acquisition of Haya Real Estate.
  • Haya Real Estate currently manages 105,000 real estate assets.
  • The integration of Haya Real Estate into Intrum will add a team of over 550 professionals.
  • Haya Real Estate's transaction volume stood at 2.4 billion euros at the end of 2022.
  • Haya Real Estate generated sales of 173.7 million euros.
  • Completion of the transaction is scheduled for the third quarter, subject to approval by the Spanish competition authority.
Fortune's most innovative companies: Experian - 04/04/2023
  • Experian named one of Fortune's most innovative U.S. companies.
  • Experian was ranked in the top 10 of the 2022 IDC FinTech rankings Top 100.
  • Experian, a global information services company, has 21,700 employees in 30 countries.
  • Experian is headquartered in Dublin, Ireland.
  • The company is listed on the London Stock Exchange and is a member of the FTSE 100 index.
30 years to save jobs in Cholet - 20/03/2023
  • Agir recouvrement was founded in 1993 and is now celebrating its 30th anniversary.
  • The company is based in Cholet, Maine-et-Loire, and has 89 employees.
  • The FSP group, to which Agir recouvrement belongs, has 125 employees.
  • Agir recouvrement has 13 sales representatives, 37 negotiators and a 25-strong legal department.
  • The unpaid market in France is worth 56 billion euros a year.
  • Payment delays represent a market worth 800 billion euros.
  • 25% of business failures are due to payment problems.
  • The average payment delay was 11 days for large companies before the health crisis of 2020, and 17 days in 2022.
  • Every year, Agir recouvrement handles over a hundred thousand cases.
  • The company's fees amounted to 9.34 million euros in 2021.
Libeo invests in Rubypayeur - 07/04/2022
  • Libeo is a British fintech
  • Rubypayeur has 4,000 VSE and SME customers.
  • This is Libeo's second investment in a French fintech in less than a year.
  • Rubypayeur boasts an 84% collection rate, with an average payment time of 39 days for invoices averaging 2,500 euros.
  • Libeo previously acquired TrackPay in a deal worth "less than 1 million euros".
  • Libeo has raised 20 million euros in capital.
  • Libeo achieved 70% growth in the first quarter.
  • Libeo is about to launch in the UK.
GCollect: ethical, digital collections - 01/07/2021
  • GCollect is a fintech specializing in the digital and ethical collection of unpaid invoices.
  • It operates as a marketplace, connecting companies with overdue invoices with debt collection professionals.
  • The platform digitizes and automates the collection process, making it accessible to all professionals, with no minimum outstanding amount.
  • The solution puts forward flexible collection proposals to facilitate debt settlement.
  • The company is a major player in collections, partnering all accounting and dunning solutions. It is aimed at all players wishing to recover unpaid debts, whatever the volume, amount or geographical area.

Companies quoted in this study

This study contains a complete overview of the companies in the market, with the latest figures and news for each company. :

sefairepayer.com
Aston iTF
Recouvr'UP - Direct Recouvrement
RubyPayeur (Atradius Collections)
GoodPayeur - Direct recouvrement
Legalife Unltach
Gcollect
Cabinet Arc
Experian
AGIR Recouvrement
Intrum
iQera

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