More than 71,600 borrowers in Cyprus have had their loans transferred to credit acquisition and servicing company portfolios since the management of non-performing loans began, according to Anthi Exadaktylou, president of the Association of Credit Acquiring and Servicing Companies.
Speaking before Parliament’s Finance Committee on Monday, Exadaktylou revealed that solutions have been found for around 39,500 borrowers, representing roughly 55% of those whose loans were moved to these companies’ portfolios.
Her comments came as lawmakers opened discussions on 26 legislative proposals aimed at reforming Cyprus’s foreclosure framework, amid calls for a new suspension of property foreclosures until the end of the year.
Majority of settlements reached amicably
According to Exadaktylou, 88% of loan restructurings were achieved through mutual agreement between borrowers and credit management companies. In many cases, negotiations began amicably from the outset, while others reached agreement following the issuance of foreclosure notices.
She also noted that about half of these consensual settlements occurred after the foreclosure framework was activated, arguing that the system is functioning effectively and encouraging borrowers willing to repay their debts to reach solutions.
However, she warned that strategic defaulters remain a concern, stressing the need for targeted measures to address borrowers who deliberately avoid repayment despite having the means to do so.
Most settlements, she added, allow borrowers to retain ownership of their property, rather than resolving debts through asset swaps.
€20 billion in outstanding loans
Data presented to the Finance Committee by the Ministry of Finance shows that total loans linked to the issue amount to approximately €20 billion. Of this, about €18.5 billion is held by vulture funds, while €1.5 billion remains on bank balance sheets.
Roughly €7 billion of these loans are held by state-owned asset manager KEDIPES, with many already classified as terminated loans.
Officials also highlighted progress in reducing private debt in Cyprus. Prior to the 2013 financial crisis, private debt stood at around 350% of GDP; today it has fallen to approximately 180%.
Vulnerable borrowers and support schemes
Exadaktylou acknowledged that elderly refugees and other vulnerable borrowers struggling to repay mortgages on their primary residence require state intervention. In such cases, companies often delay enforcement procedures while potential solutions are explored.
Foreclosures are also paused for borrowers participating in government housing support schemes until a final decision is reached.
Meanwhile, government programmes aimed at protecting primary residences — including “Estia”, “Home”, and “Mortgage-to-Rent” schemes — are expected to benefit between 3,000 and 3,500 borrowers overall.
Foreclosure freeze under consideration
Political parties are currently debating a temporary freeze on foreclosures for homes valued up to €400,000, potentially lasting six to eight months, to allow time for legislative reforms.
A government bill is also being prepared to strengthen the authority of the Financial Ombudsman and improve insolvency procedures, though its passage before the current parliamentary term ends remains uncertain.
Final decisions on both the legislative proposals and a potential foreclosure suspension are expected in the coming days.
