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Vitaly Shevel is one of the leading figures in Ukraine’s burgeoning debt collection industry. In a country that has seen a free market system in less than a generation, debt collection is becoming an indispensable support structure to the Ukrainian economy. In this interview, Mr. Shevel shares his insights on the present and future of Ukraine’s debt collection industry.

Steve Gan: What was the leading opportunity for you to begin your career in the debt collection field?

Vitaly: When I did my degree in law I was very disappointed in the legal practices in Ukraine. At the same time I had the opportunity to try for myself in collection and I liked it. Then I met GCS and got in font of development opportunities it gave us. New markets, great opportunities, interesting job, warm social atmosphere – what else can young man dream about? Seriously, it is very pleasant to do something new in my country, develop new market, make business environment better by your own hands. Even from the ethical side my personnel and I consider that we protect and secure good people and punish and chase bad ones; in some meaning fight for justice.

Steve: At the time you started out in this industry, what was the general landscape of the debt collection industry in the Ukraine?  Did the break up of the Soviet Union impact your debt collection business and activities? How has it developed over the past 5 years as far the number of agencies and laws?

Vitaly: After fall of Soviet Union all collection we had was only so-called street collection, they “knocked out” money in the direct sense of the word. Later on at the end of 90’s the era of criminals was finished and the business became more civilized. However even when I started in 2005 there was no debt collection in the sense of the word. Several legal companies offered service of B2B or C2C debt collection which at that times meant simply going legal against the debtor. Banks were totally busy by the credit boom which had recently started and did not pay much attention to risk management and collection at all. As one my acquaintances, a development manager in bank, told me at that time: “we should give money to everybody to occupy the market. If we do not give – our competitor will do it instead of us.” That was the philosophy of bankers that time – so nobody even thought about B2C collection.

However since 2006, the situation became to change tremendously. First prototypes of collection agencies were registered. Inevitably, a result of credit boom was that bad loans portfolio appeared and bankers as well as businessmen started to realize it is a problem. So first “classic” B2C collection agencies were registered. In addition, 2007 was year of attempts and finding out the best way to collect money. That year I started to develop B2B collection department in as a big collection company but also I was involved in B2C too. I  recall very well how we were trying to elaborate first contracts with clients from nothing, loads of business processes flowcharts, hard negotiations about software, endless personnel trainings etc etc.

The further – the harder. Then 2008 became year of crisis and year of small one-day agencies. Everybody liked to collect money for banks, so hundreds of small B2C collection agencies were created. The situation was so bad that the government even offered to prohibit collection businesses in the Ukraine. Thank God it did not happen because most of the small agencies disappeared by 2009 due to hard competition and in general situation became stable.

In August 2009 the government accepted the law that made buying of debt portfolios reasonable and relatively easy. The first deals on buying of banks’ B2C portfolios were registered. Despite this we still have no special law about collection agencies and due to the weak B2B collection market, I consider it has been a great development to have a debt collection market within 0 ~ 5 years only.

Steve: Back in 1996 when I was living in Japan, I had the opportunity to present on debt collection to a group of business people from Vladivostok, Russia. They were quite surprised about my debt collection activities and felt they were too gentle. In their view, threats and even physical force against a debtor are the ways that debt collection is often performed in Russia. What are your thoughts on this? Are the collection activities in Russia and Ukraine basically the same or are there significant differences?

Vitaly: I can believe Steven that that was true in all former Soviet Union in 90’s. Usual portrait of debt collector at that time was a guy in sportswear with small weapon or gun. However now the situation is totally different. No collection agency in Russia, Kazakhstan or Ukraine use threats or force against debtors. Everybody tries to be totally legal, ethical and polite. I know that some agencies even try to abide your FDCPA including its provision in their codes of ethics!

To be fair I should of course say you can meet some quite rude men in black in Kazakhstan; maybe sometimes some collectors in some regions of Russia are quite severe; some not very fair field agents exist in Ukraine, but in general no force, threats, rude or non humane methods are used by collection agencies in former CIS. (saying nothing of course about pure bandits and criminals). Our collection business became quite civilized very quickly, for nearly last 5 ~ 7 years.

Steve:  Where do you see the credit risk management industry heading over the next 5 ~ 10 years, not only in Ukraine, but in other countries that were part of the Soviet Bloc as well?

Vitaly: Considering our achievements for the last 5 years I think in the next 5 years we will have collection industry very similar with the one in the countries of EU. Even now some European institutions started their investments and penetration to Russian market. Particularly I heard Swedish Lindorff and Svea, German EOS, Intrum Justitia started some projects in Russia. IFC declared their intention to buy debt portfolios in Russia and Ukraine in 2010. So I think we will have developed B2C collection market very soon. I do not think special collection law will be adopted despite of their drafts are considered by governmental institutions of Russia and Ukraine; however it is not an obstacle to collection business development. I would not be so optimistic as for the other segments like B2B collection, risk management services like due diligence, credit reporting. These services are very new for our countries. The main part of businessmen in former Soviet Union know almost nothing about credit and risk management. Such instruments as credit reports, commercial investigations, KYC etc are not used at all. Providers of such services made great endeavors to promote them, but the progress is slow. I think only change of business mentality can cause great developments. It will not happen in year or two. Probably we should work on this for next 3~5 years.

Steve:  Tell me a little bit about your debt collection services. What makes your agency stand out from among the others?

Vitaly:  In the market where 90% of players deal with B2C collection, Global Credit Solutions Ukraine tries to be innovative company on the edge of development. When I talk about our strategy and who we are I like to employ term “partisan strategy” (with reference to respected author of the term, Jack Trout). Our philosophy is to find new fields and markets and occupy them in the time when most players fight for the B2C hill.

Nowadays 45% of our work is collecting of international debts. We have almost no competitors in this segment neither in Ukraine nor in Russia or Kazakhstan. Our usual competitors Coface, TCM, Intrum are much weaker in the terms of coverage in the former Soviet Union, so we keep the segment. Other 26% of our turnover is made by B2B collection. We were pioneers in Ukraine when started to position ourselves as B2B collection agency in 2008. We occupy the big part of this very young market and actually we are building the market itself, promoting B2B collection in the business environment.

Steve: Are there debt collection activities that you are allowed to perform in Ukraine  that would be restricted in the US or Europe?

Vitaly: I guess so. We have no special laws about debt collection so it gives us wide set of methods and techniques available. I think usual method of contacting the relatives, employers, partners and other persons related with debtor regarding his debt would not be allowed in Europe or the US, despite it is not prohibited by laws in our countries.  We are not obliged to cease communication if the debtor refuses the debt as well as if the debt is disputed. The popular in Russia method of PR support of the B2B collection (publishing info about the debt to press the debtor) I guess can cause loads of lawsuits if such attempt is made in the US. We have no specific obligation about time and place of contact with the debtor, however most of agencies conduct business ethically and do not call or visit debtor after 10:00pm.

Steve:  Besides debt collection, what other products and services do you provide in which demand has grown significantly over the past few years?

Vitaly: We also provide credit reporting; however the market is still not ready so we sell less than 50 reports annually. Our few competitors sell more, but almost all their reports are for outside clients, mostly for European companies, not for internal market. We also provide commercial investigations. Anti-counterfeit investigations are constantly growing mainly because of general growth of counterfeit threat in the world. Also Ukraine is convenient transit territory for counterfeit supplies in Europe. Search of assets and people and checking of corporate backgrounds are other kind of investigations that is quite popular in Ukraine. It is necessary to note also that all our investigation customers are foreign companies, internal demand stays very low.

Steve: How have internet scams and other fraudulent schemes impacted your agency’s services?

Vitaly: The scams and schemes in that form you meet them do not impact us. The reason is very simple – we are not allowed to collect on our accounts. I.e. we are allowed to collect to client’s account directly only. So our system is not subject to the kinds of frauds US collection agency may be exposed. However sometimes we meet fraud attempts from client’s side – when a client tries to hide the fact of receiving the money from the debtor to not pay our commission.

Steve: What is the one final thought or idea that you would like to leave with this interview?

Vitaly: I would like to thank you for the opportunity to “open the window” in former Soviet Union’s market and present our collection industry to the Western readers. We did the great step in development for the past 5-10 years and now we actively take best practices and experience from Western markets. I hope we will build developed debt collection market very soon.

Please send inquiries to: Mr. Vitaly Shevel at

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