India’s Credit Market on Achieving Ethical Debt Collection Through Technology

14th Sep 2021, Technology

Ethical debt collection and technology have always been our bedrock in running Flow. We believe that the collection process needs to be leveraged by personalised communication, and innovation to thrive ethically in the market. Lenders will then, not only be more flexible with supporting their borrowers, but also improving their overall lending and collecting experience.

Thought article published on LiveMint: Read here.

With the spread of the Covid-19 pandemic, multiple industries worldwide have been forced to shift their business operations online. Many people started adapting a work-from-home lifestyle to further prevent the spread of the virus. This switch to a potentially new living standard has greatly affected economies across the globe including the Indian economy with an estimated GDP between 7.5% and 10% in the financial year of 2020-21. Similarly, the banking, finance and credit industry have also been severely affected. Let’s take a look at the current scenario of the credit market in India.

The Current State of India’s Credit Industry

While the credit industry has maintained a stagnant position for the previous years, the year 2020 saw a deceleration in credit growth of 7.6% in March 2020 from 12.3% in March 2019. The rate of growth in personal loans has also decelerated to 15.7% in March 2020 from 16.4% in March 2019. However, the industry saw incremental improvements in November 2020 but continued to stall.  Furthermore, the pandemic has pushed over 30 sectors to increase amounts of debt that account for over INR 40 lakh crores with the worst hit, agriculture, and allied products with INR 9.8 lakh crore of debt. Non-banking financial companies (NBFCs) with INR 7.98 lakh crore of debt, retail and wholesale trade with INR 5.4 lakh crore.

Covid Has Made Going Digital an Urgent Matter 

The ongoing pandemic has, therefore, made going digital an urgent matter for creditors. Though the processes involved to collect the debt has progressed over the years, many still steer away from investing in credit technology due to the unpredictable relationship of lenders with borrowers. The advancements of technology and technological adoption today can provide tremendous amounts of data to help understand borrower’s behaviour, thus, improving the borrowers’ perception of collectors.

What can Lenders do?

The first step is to make sure lenders adhere to ethical guidelines in the strictest sense of the term. This means that collectors must have in-house ethical guidelines or boiler-plate instructions on which agents can build an ethical framework. Let’s look at how best to achieve this.

Use of technology for better reliability

Technology has been helpful in promoting innovation and helping gain efficiency to a lot of Fintech companies. Their primary aim is to develop the financial services provided to the customers through customer experience management and to reduce the dependability on humans. Similarly, it helps operators in today’s world to function successfully.

For example, a call centre enables good quality services by adopting technology that smoothens interactions between operators and borrowers. This means installing the latest hardware and software and making sure that they both work to their potential.  Here, using Artificial Intelligence and Machine Learning will ensure not only better targeting but also personalized messaging for the borrowers, thus ensuring personalization and efficiency.

Understand Borrower’s Emotions

The pandemic had caused a huge emotional turmoil for a lot of people. It, therefore, becomes very important to understand the emotional toll that the borrowers might be facing at their end in terms of loan repayments and continuous calls. One of the most important aspects for lenders today is to ensure a robust communication strategy for debt recovery and better management of the borrowers.

The lenders should understand the current situation of their customers and accordingly empathize with them by offering restructured repayment solutions. FLOW is a credit management company that uses fintech with the aim to redefine debt collection. It uses fintech to do in-depth research about its customers using multiple data points and thus devising a detailed strategy method accordingly.

Their technology isolates aspects such as loudness (amplitude), the strength of the voice, and talking speed. Put together, and the resulting emotion model predicts – with exceptional accuracy – speakers’ emotions help in understanding borrower’s emotions. Speech analytics solutions help operators to predict consumer behaviour by monitoring their emotions. This human-friendly approach makes the whole process seamless and eventually deliver an enhanced experience to the customers.

Gain A Deep Understanding of Agent-Borrower Conversations

It is important to understand and dive deeper into the conversations between agents and borrowers in order to understand and analyze tons of data relevant to the agent borrower conversations. FLOW uses an approach which is the use of named entity and keywords extraction technique.

This approach produces insights that shed light on trending issues in a given period. This is achieved by focusing on the frequency of certain words as mentioned during the conversation.

This might seem a lot, but it is exactly what debt collectors need to do to understand conversations between agents and borrowers. Similarly, sentiment analysis can be used to target things such as voice segmentation level, which enables operators to see a clear trend of changes in the sentiment during the flow of the conversation.

Considering all of these above factors, it is completely possible to build a healthy relationship between the borrowers and the lenders and ensure better feedback at both ends.


FLOW believes that the process of loan collection needs to be leveraged by using agility, smart and personalized communication, and innovation to thrive ethically in the market. The extensive options provided above allows lenders to not only be more flexible with their borrowers but also improve their overall lending and collecting experience.

This month, we are narrowing down more on using technology for ethical collection:
1. Sign up for our webinar with industry experts: Click here.
2. Next, stay tuned for a whitepaper on utilising technology for ethical debt collection coming your way really soon!