Evaluation of debt collection techniques used in Malta

Abstract

During the last couple of years, debtor days were on the rise as was the charging of interest on business, the number of defaulting clients, the writing-off of bad debts and the resorting to barter to recoup outstanding dues. It was felt that the problem of debt and its collection has been further aggravated by the global slump. I have attempted to look into the local situation and study the debt collection methods used. I have observed that whilst some of the techniques used can be classified as 'normal standard procedure', more and more companies are becoming increasingly conscious of such an important activity and therefore applying other techniques which may be considered relatively new to the local scene. After analyzing the responses from the questionnaires and conducting interviews with local entrepreneurs, an evaluation of the costs involved for a company to conduct a debt collection exercise was made.