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Debt collections in times of uncertainty

It’s widely agreed and accepted now that social distancing is the only way through which we can prevent the spread of Corona virus. Let’s also accept that social distancing is here to stay for more than a few weeks, until we are given the all clear.

Corona or COVID-19 has already disrupted lives — be it at the individual level or the way that corporates function. Traditional NBFCs are no exception. Let us take debt collection as an example.

Debt collections, as most of us are already aware, typically happens either through a call centre or a field agent – or a combination of both. In the current environment, both physical collection through field agents or large call centers present a significant risk to contagion.

At the same time, in both calling and field collections, the ‘old school’ way of collecting debt is highly labour intensive and inefficient.

A Collections Field Agent has a maximum capacity of around 10- 12 cases (based upon the assumption that the assigned cases are all in the same area and in fairly close proximity of each other). If rural cases are included in the day’s tasks then the number of cases they can tackle significantly reduces. Poor weather conditions also reduce the rate of physical collections. In addition, it often takes three visits before the outstanding payment is actually made.

The potential risk of contracting or on passing a virus such as Corona would be further amplified in such a scenario. Worse, the alarming rate at which the virus would spread — if the agent continued to work, considering the volume of people s/he would come across during across the day is a disturbing thought.

The benefit from using a tech based collection platform is that it is very easy to continue to work when you are trying to maintain social distancing.

As long as you have a laptop and decent internet speed, digital collections can continue without the need for any physical face-to-face discussion since all the work is carried out from using the platform. Productivity remains the same.

In effect, technology can help build a distributed call center so that anyone anywhere can login, get cases assigned, begin calling, benefit from our data science and machine learning algorithms and begin collecting. Managers and team leaders can also be remote and monitor overall and individual collection caller performance. The use of technology can also automatically assigns cases to the best fit agent – e.g. based on language, empathy or previous ability to collect for certain lenders and scenarios.

Therefore companies like ours are still able to continue call center scale collections on a distributed and remote basis but with significantly improved real time allocation, task management and reporting. Call agents can still allocate tasks to cash pick up of field agents but these are managed by the machine and no longer require the call agent to know the field agent or his or her location.

Interestingly, we have seen a spike in digital collections with no human contact borrowers responding to messages and paying online. As all shopping malls, movie theatres, bars and nightclubs in certain locations are shut down, disposable income should theoretically be much higher than normal.

India is still predominantly a cash economy and culturally it is not a natural thing to encourage social distancing.  However In such times, behaviour must change in order to adapt to the circumstances.  Therefore it is important that we play our part by reminding borrowers to do so in order to reduce chances of infection.  Opting for online payment is perhaps the best way to stay safe rather than asking for someone to collect cash from their home.


-Authored by Jonathan Bill, Co-founder & CEO, CreditMate


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