Indian Banks to Partner with Coface for International Commercial Debt Collection

French credit management services company Coface is currently in discussion with several Indian banks to recover debt from overseas companies.

Public sector lender, Punjab National Bank (PNB), has retained Coface as debt recovery agent for international commercial accounts. Five more banks including Union Bank of India, Corporation Bank, Dena Bank, Andhra Bank, and Shamrao Vithal bank have also opened up talks with Coface for trade receivables management services.

Samuel Jesuratnam, country manager, Coface India, said recently in the Mumbai-based Financial Express, “Taking lessons from the financial crisis, many banks and corporations want credit and business information on well-rated companies. Following that, we now aim to sell our business and credit information services aggressively."

As Coface looks to further expand its international receivables management presence in South Asia, it recently released the findings of a survey showing that proprietary firms in India were highly vulnerable to repayment risk on loan products. The ongoing global financial crisis has produced a higher risk of credit defaults among firms managed by single proprietors in India, according to the survey.

“Excess credit exposure without due diligence sometimes causes defaults among proprietary firms,” said Gladys Tejuraa, Coface India, in The Financial Express. According to the 2009 survey, 37% of single-proprietor companies (out of the 905 companies surveyed) carried higher risk of defaults on loan instruments. By contrast, joint venture entities showed greater resilience against the financial crisis with substantially lower default risk.

As global economies begin to emerge variously from the wide-ranging financial crisis of 2008, strategies for accounts receivable management are increasingly likely to be deployed across geographic and political boundaries.

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