According to an annual report by EOS - one of Europe’s leading receivables management companies - households has sought to repay overdue debts that were not subject to the government credit moratorium.

Budapest, February 20, 2021 - The year 2020 also caused significant uncertainty in the receivables management market. Although it became clear in the spring that the state moratorium did not apply to debts that had already expired or terminated and such managed by the debt management companies, one of the leading players in the market, EOS Hungary, tried to help debtors in trouble due to the epidemic with a voluntary moratorium.

“In the first quarter of the year, we experienced a significant uncertainty in the economy, as neither the assignees nor the assignors could have foreseen exactly how the government is planned to handle the crisis, and what measures would apply to which companies, and for how long. This uncertainty meant that we registered a significant slowdown in the primer non-performing loan market” said Tamás Lencsés, Managing Director of EOS Faktor Zrt.

The voluntary moratorium introduced by EOS was twice for a period of 3 months, which meant that if a debtor claimed fairness on the grounds of the situation caused by the epidemic, he/she could be exempted from repayment for up to 6 months. “Experience has shown that less than 1% of our debtors took advantage of this opportunity, indicating that the population was consciously trying to use the funds, freed up due to the credit moratorium, to repay its already overdue debts. Although the voluntary moratorium has expired, in line with our corporate purpose, we continue to look for opportunities to find flexible solutions for our debtors in trouble due to this pandemic” added Tamás Lencsés.

In the second wave, the NPL market for receivables was almost completely dried-out, as it was and still not possible to terminate contracts of overdue receivables. Nonetheless there are already signs of a resumption of assignments for late 2021. “We have already registered receivables package sales; however, they lag far behind of the previous years both in volume and value. The assignors are following a sit and wait strategy, and they will understandably make steps if they see what claims will appear in their books after the credit moratorium expires.”

According to the EOS Hungary report, when the financial service market can restart depends on the arrival and distribution of vaccines, but the situation is significantly different from the period of the 2008 financial crisis. “While the direct cause of the previous crisis was over-lending, it is now a more conscious and frugal attitude towards the population. We see that the economy now has more reserves than it did 13 years ago. We are currently looking forward to the resumption of the economy and the NPL market in the third to fourth quarters” the CEO added.

At the beginning of 2020, the year started with optimistic expectations, because although the situation was constantly analyzed at EOS, it seemed that the epidemic would not have a decisive impact on daily work processes, but in early March the company had to switch to  teleworking in a matter of days. "Our situation was fortunate, as we introduced a regulated way of working from home at EOS Hungary shortly before the start of the epidemic, so the changeover did not cause a significant disruption to business operations" said Viktória Kovács, HR Director of EOS Faktor Zrt.

The company put half of its colleagues in home office at the beginning of the first wave, and by June, almost the entire staff had worked from home. The most complex part of this process was the preparation of the IT infrastructure, the administration of various declarations and official documents was already remote. Nearly 90% of the company’s employees currently work from home during the second wave. “The crisis has forced us to rethink our cost structure and our primary goal has been to retain the employees we have managed to achieve. Despite the crisis, EOS Hungary is extremely stable and has successfully retained the expertise that underpins quality service” said the expert.