Manx Financial Group enters the SME debt management market
- Manx Financial Group PLC has obtained regulatory permission to manage and collect debt on behalf of other companies through its wholly owned subsidiary Manx Collections Limited (“MCL”)
- Small & Medium-Sized Enterprises’ (“SMEs”) debt burden is ballooning with company borrowing to survive the pandemic expected to reach more than £60bn
- MCL will manage and collect SME debt on behalf of others to allow the lender to focus on more resilient SME sectors
Manx Financial Group PLC (LSE: MFX), the financial services group which includes Conister Bank Limited, Conister Finance & Leasing Ltd, Blue Star Business Solutions Limited, Edgewater Associates Limited and Manx FX Limited, announces that it has obtained a Variation of Permissions for its wholly owned subsidiary Manx Collections Limited (“MCL”) to manage and collect debt on behalf of third-party lenders from the Financial Conduct Authority (“FCA”).
The announcement comes at a time when the UK’s SME debt burden is ballooning, with company borrowing to survive the pandemic expected to reach more than £60bn net of repayments.
As these debt piles continue to grow, the compliance requirements relating to consumer lending are discouraging established lenders from pursuing opportunities in this market, leaving many desperate but resilient SMEs unable to access much needed credit.
The Group remains committed to SME lending, both regulated and unregulated and, has the existing infrastructure and compliance resource to manage other, less well-resourced lenders’ debt.
This will allow those funders to focus on lending to resilient companies.
Douglas Grant, executive director of MCL, commented: “As the SME debt burden continues to grow, we are in serious danger of seeing a relentless flow of weak zombie-like companies falling off a loan default cliff. It is imperative that we avoid compounding this cycle by focussing solely on supporting sectors and businesses that are resilient and agile enough to adapt to the new economy. The FCA’s approval to allow a Variation of Permissions for MCL allows us to work with these businesses and use debt adjusting and debt counselling permissions to review and restructure debt as required. We already have experience of managing these processes within the Group, but we believe these permissions will be vital in ensuring that debt is managed in line with conduct and TCF principles.”
With this Variation of Permissions for full permissions approved by the FCA, MCL will also become the repository for any books of business.
