Since decades the debts’ collection by the lending firms and banks have been manual, long and tedious processes. Mountaneous paperwork and being bullied by lending agencies had not only harassed customers, but led to several legal battles. With the government and Reserve Bank of India making it clear not to bully lenders, the process of collections are more streamlined now. Adding on, digitisation has played a key role too. Software as a Service (Saas)-based debt collections and resolution technology platform Credgenics’ CEO Rishabh Goel said in a frank interaction with Mint, on how the whole debts collection scenario has changed in past few years due to digitisation and arrival of new technologies.
Excerpts:
1. With FM and RBI clearly mentioned not to bully lenders, how do you define yourself from the ones who appear at doorsteps and threaten lenders to pay?
Credgenics’ technology platform has built-in comprehensive checks and control mechanisms that ensure strict compliance to the applicable RBI norms. We facilitate a very customer-centric, compliant and dignified approach in collections. We encourage the adoption of an unobtrusive, personalised and digital communications approach along with a comprehensive digital collections strategy. We prioritise clear communication, negotiation, and empathy, aiming to find mutually beneficial solutions for both lenders and borrowers while maintaining a respectful and ethical approach throughout the collections process.
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2. How has the pandemic affected the digital debt collection industry in India?
While the moratorium, lockdowns and economic hardships posed challenges, the rapid acceleration in digitisation initiatives and adoption of emerging technologies across the industry segments unlocked new opportunities. The debt collections and recovery processes have been largely manual effort driven, relied on bulk treatment strategies and lagged behind in digitisation. As a result, they continue to be cost inefficient, difficult to scale and stagnant in performance.
In the post-pandemic phase, lenders witnessed the power of digital enablement and the effectiveness of adopting data-driven insights for making the collections processes more effective. With digital transformation, banks and other non-banking finance companies are now adopting it for collections and witnessing the remarkable positive impact that it delivers.
3. What do you see as the future of digital debt collection in India? Why should fintech lenders/banks reach you?
Over the past decade, the financial services sector has evolved tremendously, thanks to access to smartphones, deep internet penetration, simpler digital payments, seamless data sharing, focus on financial inclusion initiatives, and the rapid rise of FinTechs. With Credgenics, we have created a huge impact on the lending ecosystem through our state-of-the-art integrated collections technology platform, which allows lenders to digitise and manage their end-to-end recovery workflow from pre-due stages to various delinquency buckets and field collections to legal stages. Our specialised technology solutions and data-driven approach have enabled us to reimagine these processes for lenders and help them get future ready when it comes to debt collections.
Credgenics currently works with over 100 customers and has handled an overall loan book worth $47 Billion in FY 2022. So far, the firm has handled 40 million retail loans overall and sends out 60 million digital communications every month. With Credgenics, lenders have increased resolution rates by 20%, improved collections by 25%, reduced collections cost by 40%, reduced collections time by 30%, and improved legal efficiencies by 60%. Credgenics is using the latest technological capabilities to provide its customers with the most effective collections management solutions, help them with complete adherence to rapidly evolving compliance requirements, and enhance customer experiences and engagements during the collections phase.
4. The fintech industry in India has grown rapidly in the past couple of years and is under government’s scrutiny. How has it affected Credgenics’ operations and growth prospects?
The ongoing policy frameworks and regulatory guidelines are a positive step in the right direction to nurture a well-defined, structured and healthy ecosystem for all the stakeholders. There have been a few regulatory policy changes that have brought the much needed clarity on various areas pertaining to the fintech, digital lending and digital banking ecosystem. With our approach to provide solutions that make collections future ready, we ensure that our platform enables banks, NBFCs and other digital lenders complete adherence to the evolving compliance needs. Since the last fundraise in 2021, our revenue has increased 7 times, our customer base has expanded five times to reach 100, and our employee count has increased to 300. We have achieved operational profitability in our fourth year of operation and reached the revenue of ₹100 crore in FY 2022-23.
5. How has the recent funding winter impacted you? What strategies have you (Credgenics) employed to overcome these challenges?
In terms of funding, our current investors Westbridge and Accel Partners have supported us well. At the moment, our focus is more on moving ahead on our growth plans and continuing on the defined expansion roadmap.
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