Increased Charge-Off Rates Spur Increase in Kaulkin Ginsberg Index

The Kaulkin Ginsberg Index (KGI), the leading indicator of economic conditions affecting the accounts receivable management (ARM) industry, has increased 2.5% to 1349.8 during the first quarter of 2007.  The KGI is up 10.4% from 1222.4 at the same time a year ago.  While the significant annual increase in the index is explained by events that occurred in the ARM industry in 2006, modest 1Q growth is largely attributed to only minor changes in six of the seven variables used to calculate the index.

The KGI’s most significant fluctuation in 1Q 2007 is the increase in the charge-off rate for all loans and leases, which rose from 0.42 percent to 0.51 percent during the first quarter of 2007.  This surge marks an encouraging sign for ARM companies.  “As creditors charge-off more delinquent accounts, demand rises for collection agencies to assist in converting those receivables into cash, or for the debt buying market to capitalize on a greater supply of distressed debt portfolios available for purchase,” said Michael Klozotsky, a Kaulkin Ginsberg Research Associate.

For more information about the Kaulkin Ginsberg Index, see www.kaulkin.com/research/kgi or call Michael Klozotsky at 301-907-0840 ext. 123.

Kaulkin Ginsberg is the parent company of Kaulkin Media and insideARM.com.