Rationalisation of the debt buying and collection market is providing a fillip for those still operating in a sector that has been hit by weak business conditions over the past couple of years. Last month Pioneer Credit acquired a Part IX insolvency debt portfolio from Max Recovery Australia, which is getting out of the market. Pioneer paid A$15.8 million for the portfolio. In December, Pioneer acquired a $367 million debt portfolio from a rival debt buyer Panthera Finance. The portfolio is made up of 32,775 credit card and personal loan accounts originated by Commonwealth Bank. Pioneer paid $24.1 million. The Australian Financial Review reported last month that Panthera is restructuring its business and may have other credit portfolios on the market. In November, Debt collector and debt recovery technology provider Credit Clear announced that it would acquire Debt Recoveries Australia. DRA and its subsidiary ADC Legal specialise in insurance and automotive recoveries. A third part of the business, Nova Team Solutions, runs a business process outsourcing operation based in the Philippines. In 2022, Credit Corp acquired the receivables of failed debt collector Collection House. Pioneer invested $59.2 million in debt portfolios in the 2022/23 financial year. It has forecast that it will invest $85 million this financial year, with the Max and Panthera transactions accounting for almost half. Currently it has $2.2 billion of receivables on its books, with a performing portfolio of $459 million and 246,000 active customers. Pioneer made cash collections of $70.7 million in the six months to December, an increase of 4 per cent over the previous corresponding period. Total revenue was up 11 per cent to $75.6 million. The company made a profit of just $50,000, compared with a loss of $1.3 million in the previous corresponding period. Pioneer and Credit Corp have different views on the outlook for the sector. Pioneer said in its December half results presentation that there were significant debt portfolio investment opportunities at better than historical internal rates of return. Credit Corp said debt portfolio supply in Australia and New Zealand remained constrained, with no indication of a recovery in the short term. Its investment in 2023/24 is likely to be below 2022/23 purchases – the third consecutive year of contraction. Factors contributing to the ongoing weakness of the debt buying market include lower than expected arrears and loss rates on consumer credit contracts, low interest-bearing credit card balances and changed bank practices for dealing with customers facing hardship.