Experts for Credit Risk Management in Russia, Baltic States and CIS
2011 IGK Group ©
Credit information Trade Credit Insurance Debt collection
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1991 – 2011
IGK – Specialist for credit risk management
1991 First IGK company was registered in Germany
1992 First companies of IGK Group were registered in
Russia and Baltic States
1993 IGK Holding was registered in Germany.
SCRL (Coface) and Intercredit Holding became members of
IGK Holding.
1994 Expansion in Lithuania, Latvia, Estonia, Ukraine, Russia 1998
2007 Separation from Coface
2007 Cooperation with leading Trade Credit Insurance 2011 companies: Euler Hermes, Atradius, Ducroire, Sinosure, Ksure, Mapfre, Ingosstrakh-ONDD and other.
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Credit reports
Monitoring
Debt collection
Trade Credit Insurance
Factoring
Consulting
Financing
IGK has 20 years experience in credit risk management services:
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IGK – Specialist for credit risk management
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IGK AG
Bonn, Germany
IGK Service Latvia
IGK Service Lithuania
IGK Service Estonia
IGK Credit Management
Moscow
IGK Credit Management
Nizhnij Novgorod
IGK Credit Management
Samara
IGK Services Ukraine
IGK Services Rus
Tambov Production office
IGK Insurance Broker
Russia
Balt Risk Baltics
Risk Ukraine
IGK Broker Baltic
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IGK Credit Management
Chelyabinsk
IGK – Specialist for credit risk management
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Supplier Client
Payment obligations ???
Payment terms = trade credits
Debt - management
IGK – Specialist for credit risk management
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Assets Equity & Liabilities
Fixed assets
- Tangible
- Intangebile
%
%
Current assets
- Stock - Trade receivables
%
%
- Other receivables %
Capital & Reserves
- Financial %
- Cash %
- Share capital
- Additional paid in capital
%
%
- Fair value and other reserves %
- Retained earning carried forward %
Liabilities
- Bank loans - Payables to suppliers
%
%
- Advance from trade debtors %
- Other current liabilities %
Structure of balance sheet from your company
IGK – Specialist for credit risk management
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Analysis of clients – information gathering
Administrative Data
OGRN-INN-KPP
Legal address
Real address
Share capital
Articles of incorporation
Power of attorney
Bank details
Financial Data
Annual reports from last 3 years
Key ratios
Plan for the next years
Management
Employees –
•Top management •Qualification •Fluctuation Products
Technology
Sales strategy
Finance
Vendors
Sector
Economy
Payment experience
Own payment experience
Experiences from 3rd parties (business partners, information agencies, trade credit insurer)
Action for payments
Bankruptcy procedures
IGK reports are approved by all
main European Trade Credit
Insurers for risk evaluation
IGK – Specialist for credit risk management
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Analysis of clients – information sources
IGK – Specialist for credit risk management
• Register • Statistik • Court
• Information agencies • Rating Agencies • Trade Credit Insurer
• Financials • Management • Transparency • Trust
• www • Mass media • Journals • Scientific publications
Public sources
Company
Official sources
Professional information
gatherer
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Russian challenges
IGK – Specialist for credit risk management
• Limited transparency of Russian management
• Tax optimized financial reports
• Limited profit
• Limited turnover
• Limited equity
• Limited credit history
• Group structures – without official connections
• Using from off-shore entities
• Gry schemes
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Analysis of clients
Evaluation
Mathematical systems
•Trade Credit Insurer •IGK
Scoring systems
•Information agencies
Expert opinion
•Risk Committee of company
IGK – Specialist for credit risk management
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Analysis of clients
Evaluation
IGK principles Range Turnover in k €
R1 1 - 50
R2 51 - 150
R3 151 - 500
R4 501 - 1.500
R5 1.501 - 5.000
R6 5.001 - 20.000
R7 20.001 - 70.000
R8 70.001 - 200.000
R9 200.001 - 500.000
R10 500.001 -
Rating Probability of default within next 12 month
A++ Lowest risk. Excellent business. High credit term 0,09%
A+ Lower risk. Old established, stable company 0,47%
A Low risk. Secured business on uptrend 1,07%
B++ Risk below normal. Reliable business 2,18%
B+ Normal risk. Business on uptrend 4,46%
B Normal risk 13,36%
C Risk above normal. Short term only 31,83%
C- High risk. Full security only 61,70%
D Higher risk. No credit term to be granted 84,15%
F Highest risk. Company on the verge of bankruptcy
92,03%
IGK – Specialist for credit risk management
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Securities
Physical
Mortgage
Pledge
Deposit
…
Personal
Guarantee from bank
Surety legal entity
Surety from private person
Letter of Credit
Insurance
Trade Credit Insurance
Factoring
Non recourse
Recourse
IGK – Specialist for credit risk management
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Insured
Portfolio of debts Risk transfer to Trade Credit Insurer
Client 1
Client 2
Client 3
Client n
Credit limit
Receivables
ROSNO
Alfa Strakho vanjie
Coface
Ingos strakh- ONDD
IGK Insurance Broker
Principals of Trade Credit Insurance
Euler Hermes
Atradius
Coface
ONDD
Insured
Insured
IGK – Specialist for credit risk management
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Principals of Trade Credit Insurance
IGK – Specialist for credit risk management
RUR.
days
Maximum liability
Payment term Automatic cancellation Waiting period Indemnification Overdue notification
Datum line
Credit line
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Factoring Client 1
Factoring Company Credit Insurer Factoring Client 2
Factoring Client n
Customer 1
Customer 2
Customer n
Customer 1
Customer 2
Customer n
Customer 1
Customer 2
Customer 3
Alfa Strakhovanjie
Coface
Ingostrakh-ONDD
ROSNO / Euler Hermes
Non–recourse + recourse factoring
Factoring + Trade Credit Insurance
Customer n
Credit Insurer
IGK – Specialist for credit risk management
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SWOT Analysis - Trade Credit Insurance
IGK – Specialist for credit risk management
Strengths:
Risk mitigation
Financial stability
Risk can be calculated
Collateral – worthy and tax optimized
Strengthen debt management in company
Weaknesses:
Bureaucratic requirements
Risk policy of insurer not stable
Cover depends not only from creditworthiness of debtor
Opportunities:
Conquer new markets with giving payment terms
Strengthen own position in front of clients in case of disputes concerning payment delays
Increase transparency and commercial goodness of market player
Threats:
Total following the risk policy of insurer by management
Trade Credit Insurance
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Securities
IGK – Specialist for credit risk management
Available Effort to create
Expenses Worth
Mortgage
Pledge
Bank guarantee
Surety
Letter of Credit
Trade Credit Insurance
Factoring
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Analysis of clients
Rating\Limit <10 <25 <50 <75 <100 <250 <500 <1000 <2500 <5000 >5000
A++
A+
A
B++
B+
B
C
C-
D
F
Risk category 1 Risk category 2 Risk category 3 Risk category 4
IGK – Specialist for credit risk management
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Debt collection
Legal
Information
IGK – Specialist for credit risk management
Securities
Services of IGK group
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Why work with IGK? • 20 years experience in credit risk
management in CIS and Baltics
• Whole spectrum of services for professional credit risk management
• Information • Trade credit insurance • Debt collection • Related services (IT,
seminare,…)
• Economic power by using the complexity of all market participants - suppliers, trade credit insurer, banks, factoring companies together with information agency and insurance broker from IGK. This helps to strengthen the position of supplier who works with IGK group.
Insured
Buyer 1
Buyer 2
Buyer 3
Buyer 4 ROSNO /
Euler Hermes
Alfa Strakhovanjie
Coface
Ingosstrakh- ONDD
IGK Insurance Broker
Bank n
Client 1
Client n
Factor n
Insured
Insured
IGK Credit Management
Buyer 5
Buyer 6
Buyer 7
Buyer n
Non insured
Non insured
Non insured
Benefits of cooperation with IGK-group
IGK – Specialist for credit risk management
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IGK – Specialist for credit risk management
OOO IGK Insurance Broker 1st licensed broker in Russia specialized on Trade Credit Insurance
Bolshaja Semenovskaja, d.40, bldg.. 1, office 609,
Business Center “Agat”
107023 Moscow,
Russian Federation
Andreas Steinborn Deputy General Director
mobile: +7 495 22 63 930
email: [email protected]
Nataljia Pavlova Key account manager commercial
email: [email protected]
Ekaterina Bolabko Key account manager risk
email: [email protected]
tel.: +7 495 287 47 60
web: www.igk-group.com
Contact details:
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IGK – Specialist for credit risk management
Status Director of IGK AG, Bonn since September 2010
Deputy General Director of OOO IGK Insurance Broker
Member of the board of the Association of Professional
Insurance Broker in Russian Federation
Consultancy Credit Risk Management in Russia
information, trade credit insurance, debt collection, factoring
Career Study Economy: Hochschule für Ökonomie, 1984–1990;
Hermes Kreditversicherungs-AG, since 01.01.1991;
Sales representative - until Aug. 2005;
Head of Representative Office Euler Hermes KV AG – from
2005 until 2010;
CEO OOO Euler Hermes Credit Management, Moscow – 2009 –
2010
Languages German, Russian, English
Bolshaja Semenovskaja,
d.40, bldg. 1, office 609,
Business Center "Agat"
107023 Moscow, Russia
Tel.: +7 495 287 47 60
Mobile: +7 495 22 63 930
E-Mail: [email protected]
web: www.igk-group.com
Andreas Steinborn