In the midst of the pandemic, it has been quite slow regarding the demand for Debt Collecting services, but now, the requests are rising and are coming from new clients and for new parts of the world. "Requests to collect debts in the USA as well as Russia are increasing and even for countries in Asia where we've almost never been before we see more requests coming in. And for the coming months, even more collection cases are expected, which isn't a good sign for the industry." This is explained by Mark Weitjens, director of AgroCheck, a credit information supplier and international debt collection agency for the floriculture industry.
For over 19 years, this family business provides credit information and is specialized in debt collection for the floriculture industry worldwide. About 85 percent of their clients are flower exporters and farms and about half of them are based in the Netherlands and the other half in Colombia and Ecuador, where they started to offer their service only three years ago.
More debt collection requests - role of COVID-19
When reflecting on the last months, Weitjens explains that it has been slow since the onset of the pandemic, but that requests started to roll in again - and quite quickly - about three months ago. When looking at these requests, COVID-19 clearly plays a large role. "In the floriculture industry a lot of exporters sell on credit and even compete with each other regarding the credit and payment terms. However, when COVID-19 hit the world, a lot of buyers, like wholesalers or florists for example, had to close their doors during the midst of the pandemic. Many buyers didn´t have any income to pay for the outstanding debts, so exporters gave them some extra time to pay off the debts. But as some of them still didn´t pay anything after a couple of months, new debt collection requests are coming in every day.”
Shift in debt collection requests
Weitjens also notices a shift in debt collection requests. Currently, they see a lot of requests coming in for debt collection in the USA and Russia. "Particularly in the USA, we see a lot of requests coming in. This shows that the situation is clearly far from stable over there." However also in countries where they usually do not have a lot of cases, requests are rising. "In Asia, in countries like Vietnam, the Philippines and China, we never had many requests to collect debts over there but now we do.”
Besides collecting debts, AgroCheck also, as said earlier, provides credit information. Their online database contains more than 35,000 companies in the industry, including over 2,700 companies registered on the ‘Warning list’. Their members, around 200 at the moment, receive entrance to this list, where they can find bad debtors immediately and therefore can prevent them from losing a lot of money. "This list is compiled with the help of all our members and is only available for our members. These members have the opportunity to log doubtful debtors, thereby preventing other members to do business with these bad debtors. This way all members help to create an up to date warning list and prevent people with bad intentions to enter this market. All information supplied by our members is screened thoroughly by our team and has to be accompanied with written proof before it is published on our website. We advise not to do any business with companies mentioned on our warning list." On top of that AgroCheck also creates dozens of up-to-date credit reports per week for her clients, including credit advice.
Future of the industry
Weitjens expects even more busy times to come as it is forecasted that many companies will go into challenging times in Q4 of this years and Q1 and Q2 of next year. "In several countries, companies received funds to continue business. However, by the end of this year and the beginning of next year, this 'fund jar' will be empty."
AgroCheck expanding in South America
AgroCheck started to offer their service in South America only three years ago and they quickly got a foothold in the market - currently half of the members are Colombian and Ecuadorian growers and exporters. Their partnership with both Asocolflores and Expoflores, proofs that both Associations are recommending the services of AgroCheck. In order to increase further they are currently planning to open an office with an own Sales Manager and contact person for their South American clients.