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Four Firms Apply for Red Loan Management License in Greece

Pedestrians walk past the bank of Greece in AthenFour companies have submitted applications to the Bank of Greece to obtain a license to manage nonperforming loans (NPLs) of households and small businesses, according to a Kathimerini report.
The firms will not be buying the loans, but their only aim is to manage the red loans and collect. They will be offering bank customers several options to at least start paying part of their debt back, such as extending the maturity of the loan and paying interest only.
The four firms are a joint venture launched by Alpha Bank and Spain’s Aktua, a company that is part of the Eurobank group and will change to a firm that can manage bad loans, a large law firm and an NPL management agency that is already active in Greece, as well as abroad.
According to the recently approved legal framework, 100,000 euros in share capital is needed for a firm to manage NPLs, an amount considered low by experts. However, other demanding criteria that would ensure transparency are involved, the Kathimerini report says.
Bank of Greece has recently provided banks with a new set of options to reach settlements with customers who have fallen behind in loan repayments. These options, which include homeowners transferring the deeds to their properties to their lender and then paying rent to remain in the house, will also be open to the bad loan managers.
The banks will be obligated to inform customers who don’t service their loans that the management of their loans is being transferred to new managers.

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