Bad credits on the rise (see Novinite)

"The Bulgarian National Bank (BNB) has estimated that up until the end of February 2009, the number of unpaid credit installments soared 116,8 % year on year.

According to the BNB, producers have the greatest share in that figure as they owe BGN 1,65 B. The average monthly rise was 23,44 % or BGN 314 M. Thus, end-February, the share of bad credits reached 3,41 % of the entire credit volume, increasing from1,99 % a year earlier.

Firms' bad credits are increasing the fastest. By the end of February they had swollen by 152 % to BGN 918 M. February alone saw a 33,1 % expansion of the bad debt volume, or BGN 228 M in unpaid installments." Novinite 26.3.2009

This is of course not a surprise. There has to be a time lag between the start of the crisis and the delays in the payment of the installement. The problem is in the way the credit managers will react. In most cases, in the first phase, they will trust the customers who will tell them that it is only a temporary issue, then they will get nervous, then the credit committee (risk management team) will get nervous and finally they will build up a recovery team to get their money back. This will take at least another 6 months, providing you can find the people with the right skills in Bulgaria (the reason being that this is the first capitalistic economic crisis). The requested skills are a mix of understanding for the legal issues related to credits and of deep understanding of the organisation of the production customers.

What has to be analysed in a hurry is do the customers have a chance to survive, how much credit can they service and how to move from today's situation to an acceptable solution. I know from personal experience that it is very difficult to find credit managers will a deep understanding of the customers' organisation. I would suggest that the best and easiest way is to outsource the business analysis to external consulting companies. That is what we did for production companies while I was working for the workout department at UBS.

Trust & Value OOD provides the right skill set and would be more than willing to engage in this activity.

The essence is: do not lose time, each month costs a huge amount in unpaid interests.

On the way to the productivity Nirvana

I hate being so negative, but on my way to the productivity Nirvana, I just encountered another brilliant example of the productivity trap. I was on my way back from Serbia to Bulgaria, driving my car through the beautiful mountains that mark the border between the two countries. I got a bol of fresh air at the petrol station just before crossing to Bulgaria, looked at my watch and was delighted by my perfect timing. I would most certainly be on time for my next appointment.

I took my car and crossed the Serbian border without any delay. I moved to the bulgarian crossing point and had to stop, the first one of a long series of stops should I say. I was handed a UBS stick and asked to move forward, which I did, not without having tried to understand the logic of this new devil machination. The poor girl did not speak English and just told me ("nova systemi"), or something similar, as my bulgarian skills are very limited.

I went to the next barrier, the real border this time and went through painlessly. The problem started with the third check-point, where a Charlie told that my UBS "not functioning". "Go back", he added. I was quite surprised, but managed to turn my car and drive back. When I reached the border, the guard, very surprised and almost upset told me that I should stop promptly and move to the first girl on foot, please, which I did. 200 meters on foot and it was snowing, nice weather for a walk.

She greeted me with her beautiful smile and gave me my USB back. Back to the border, back to Charlie, and guess what, same problem. Charlie again, "go back". Me, "Forget it". He forgot it and I moved to the third check-point. The girl screamed, "I bank, not working USB, go back". I almost said "fuck off" and just went to the fourth check-point. There, no way to move forward, the check-point was closed. I started to negotiate with my reduced bulgarian skills. The woman there was very comprehensive. She tried everythink she could, told her boss, I was diplomate and in a hurry, but it still took about 45 minutes.

The essence of the waiting time, was "do I have a vignette for the bulgarian roads?". The answer was of course yes and I showed it to the guard. She told her boss that yes I have a vignette and yes it is for 2009. The answer was "wait a moment, we will check, this example is not in our book of law". Finally she let me go.

4 employees, 1 USB stick and 60 minutes later, I was again on my way to Sofia, too late for my appointment.

Now can someone please explain to me the logic of all this. At least they have abolished the tax they use to perceive to clean my car coming from Serbia. What is sure is that a software company did make quite a lot of money.

There is a beautiful "bulgarian" word for that: ABSURD