Bache Investments looks to debt collection

LOCAL bad debt collector and buyer, Bache Investments is to introduce a bad cheque guarantee scheme aimed primarily at businesses according to the company's director of debt collection, Anthony Russell. At the cost of a membership fee and a percentage of the sum the cheque was written out for customers, are assured that their cheques will be honoured.

The success of the new financial service which will offer some cash flow relief to many businesses will call upon Bache Investments' track record in debt collection. Founded 18 months ago to collect debts from delinquent clients of parent company, Creative Finance, Bache Investments has attracted over J$200 million into its collection portfolio and estimates this to reach J$600 million within the next twenty four months. With 65 companies on its books, Bache Investments boasts exclusive accounts such as Coca-

Cola Jamaica, Berger Paint Jamaica, Minot Chemical, and Sherwin Williams Jamaica. It is currently in negotiations with Courts Jamaica for collection of its bad debt accounts. Bache Investments is believed to be charging its exclusive clients up to 15 per cent on debts collected and up to 25 per cent for non-exclusive accounts, if it does not have to go to court. If it has to take legal action this may go up to 35 per cent. In addition to collection, which accounts for 75 per cent of its business, Bache Investments buys bad debts, which takes up the remaining 25 per cent of its business activities. Buying of bad debts has increased in popularity over the past five years with the collapse of several financial institutions in Jamaica. The latest bad debt portfolio coming to the market is a J$40 billion mixed package by Financial Sector Adjustment Company (FINSAC), the government's financial sector restructuring entity. The current number of bad debts has lead to a call for heavy discounts with those not heavily collateralised discounted by as much as 80 cents on the dollar Mr. Russell pointed to the availability of discounts of between 40 cents to 75 cents on the dollar existing on some bad debts. Mr. Russell said he was currently in the process of buying J$57 million of bad debts to add to Bache Investment's portfolio and was awaiting completion of another proposal to buy bad debts from FINSAC, "now that they are prepared to offer smaller packages". Ocwen, a US-based company is believed to be assisting FINSAC in the packaging of the J$40 billion bad debt portfolio . Mr. Russell believes the debt-buying venture will complement the collection arm of his operations which is the core business of Bache Investments and that the company has the appropriate structure to deal with debt collection. He boasts two in-house attorneys, four debt recovery specialists, five local investigators on the road, and two collectors/investigators overseas to do skip trace - tracking a person for up to 10 years. Mr. Russell said they employ English methods of debt collection which require strict procedures.

While attributing much of the negative experience which Jamaica has had with bad debts to the state of the economy, Mr Russell thought credit control had been lacking. Comparing the business culture in the United States with that of Jamaica, which he thinks allows for "slackness" He said, "They (persons) are not forced by the business culture to tow the line ... in the US it is different and people have to tow the line."

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