As the golden years of the global economy are waning, more and more companies and private households are feeling the ever-increasing burden of debts. Currently, there are 253.000 debtors registered in Lithuania. The average debt of natural persons amounts to EUR 1,444. For legal entities, it’s almost EUR 4,900. The cost of debt administration is rising, and individuals are reluctant to negotiate debt repayment.
To deal with this issue credit management and debt collection company LEGAL BALANCE lately released a new mobile self-service tool. Experts say the app ESKOLOS will increase the efficiency of debt management for businesses. The proposed new solution will also encourage faster repayment of liabilities.
According to LEGAL BALANCE CEO Marius Šlepetis, the app would also be useful for self-employed citizens. Both individuals and legal entities can register debtors in the app.
“Until now, Lithuanian businesses did not have a tool that would offer convenience as well as a significant reduction of debt administration costs. The ESKOLOS app provides easy access to a large database of debt-related information. The app also offers practical tips on covering liabilities and recovery of loaned money. We believe this product will increase the percentage of recovered loans to businesses and general cash flow by at least 20-30%,” Šlepetis is convinced.
A universally shameful topic
One of the most attractive side effects of the ESKOLOS app is the elimination of psychological discomfort which is hardly avoidable when directly contacting the creditor. The app offers automation of debt repayment schedules, convenient for both sides.
“It is important that debtors using ESKOLOS gain control over the management of their liabilities and have access to real-time information on payments, debt management actions, etc. The debtor is no longer forced to experience stressful phone calls regarding missed payments because the app provides a full range of debt management capabilities,” Šlepetis emphasizes.
The CEO of LEGAL BALANCE also notes that the tolerance of businesses toward outstanding debts is decreasing. The companies offer shorter repayment terms before informing debt managers or bailiffs.
The app ESKOLOS app can be downloaded for free from Google Play and Apple App Store.
Risk of friendly loans
Another innovation introduced in the ESKOLOS platform is keeping legally binding records of interpersonal loans. Such a practice would reduce disputes about debt repayment. The creators of the app predict that this feature will become one of the most popular tools in the long run.
A survey conducted by LEGAL BALANCE shows that 41% of Lithuanians with a monthly net income of at least EUR 500 have lent money to friends and relatives in the last 12 months. 36% of such loans are in the range of EUR 100 to EUR 500. Smaller loans of up to EUR 100 make up a share of 25% of interpersonal loans.
41% of respondents who have lent money in the last 12 months have faced debt non-repayment. In 20% of cases, terms of loaning to friends and relatives were not defined at all. 71% of respondents stated that the terms of debt repayment we discussed verbally only.
Mr. Šlepetis mentions that the platform also offers vast analytical potential because monitoring the dynamics of borrowing offers LEGAL BALANCE a real-time overview of the state of the economy and individual sectors.
Currently, the ESKOLOS app serves more than 4 thousand active users. The debt portfolio managed by the users of the app is currently EUR 20 million.