Non-Performing Assets (NPA) problem is a issue that several countries including India are finding it hard to address. Reports suggests that bad loans reported by non-banking financial companies (NBFCs) may rise after March 2022 following RBI's clarification on upgradation of non-performing assets. While concerned authorities grapple to address problem of NPA, firms like Credgenics may have a solution.
Credgenics, is a recovery and technology enabled collections platform that works with financial institutions, banks, NBFCs & digital lending firms to improve their collections efficiency. The platform uses technology, automation intelligence and optimal legal routes in order to expedite the recovery of bad loans. In an exclusive conversation with India TV, Credgenics CEO and Co-Founder Rishabh Goel talked about the billion dollar NPA problem in the country and how they aim to resolve it.
How the two IIT Delhi Alumni along with the lawyer meet and aimed to solve India’s $200 billion+ bad debt problem?
It’s more than a decade that the situation of NPA crises is particularly serious for the Indian banks that are already struggling to cope with the rising bad loans and lost assets. Founded in 2018 by two IIT Delhi Alumni Rishabh Goel and Anand Agrawal, and advocate Mayank Khera, Credgenics aims to solve India’s $200 billion+ bad debt problem.
Rishabh and Anand know each other, IIT-Delhi being their alma mater. Rishabh, after completing his studies in engineering, started working with Deutsche Bank and Blackrock, respectively, as an Investment Banker, while gaining experience in the nitty-gritties of the lending and collection process. Anand, at the same time, was working with the founding team of 1mg. Mayank, whom they knew through common friends, was already practicing law and working on promoting judicial inclusion to the under-represented. He has been on the panel of NHRC and is a certified mediation and a fellow at World Mediation Organization, Berlin. Somewhere in 2017, when Rishabh was working with Blackrock, he noticed that the collection process was still archaic and more than two decades old with gaping loopholes in data management and utilization, manual processes, harassment to the borrowers, and ultimately huge time and cost investment. It was his resolve to break the vicious loan cycle that in 2018, with the help of Anand and Mayank, he started shaping up Credgenics.
What is Credgenics SaaS-based platform?
Credgenics is a SaaS-based platform that renders end-to-end services that begins with the data collection and stretches to the legal services in case of doubtful debts or lost assets. The platform becomes a bridge between the lending and the collection platforms for the banks, NBFCs, and fintechs. This platform is fast gaining reputation for the Client Relationship Management as they provide strategic guidance for loan recovery with recovery predictions and analyses at every stage for each case. Credgenics is a one-stop shop for their clients by providing end-to-end loan recovery solutions, including the legal notices and remedies. The Collection Management System and Automated Recovery Pipeline are made easy through the delinquency CRM Tool as it maintains an advanced analytics dashboard. The platform provides daily updates for events and helps to sort and filter the portfolios, basis the DPDs, using multiple variants. The legal services are robust with the dedicated team of lawyers pan India. It involves sending digital and physical notices to the defaulters, registering complaints against them defaulters in the Indian courts and NCTs, encouraging e-mediation and conducting Online Dispute Resolution, if needed.
How does Credgenics-Debt resolution platform, convert bad debts into good assets to help banks, NBFCs?
The platform is an end-to-end, SaaS-based, collection management tool, which delivers customized strategies, and recommends optimal legal routes to facilitate faster resolution of stressed assets. This helps creditors efficiently improve their NPA (non-performing asset), geographic reach, and customer on-boarding.
In India, where the credit demand of more than $600 Billion is being met through informal sources, digital lending is set to cross $100 billion mark by the end of 2023. Increased disbursement of credit has also led to a spike in NPAs for both NBFCs and banks.
Ours is the only platform that presents end-to-end management and transparency on performance of all collections efforts on a single platform. We have been successful in improving the recovery rate by 20% for our clientele which we have been able to achieve through the efficient integrations and data management through API and SFTP. The seamless management and transparency on performance of all collections efforts in a single platform. The said improvement in recovery rates and time efficiency with lower overall costs of recovery across delinquency buckets has been possible through cloud-based systems for quick deployment and updation. We are able to substantially reduce the legal burden through digital bulk send out of legal notices, bulk real-time tracking of notice delivery, where in case of digital notices the time stamp and clicks/open are tracked, and in case of physical notices actual delivery status in real time from Speed Post is checked and tracked by our team. To top it, the intuitive dashboards enable the optimisation of digital communications, collections channels and call centre agent performance. The legal workflow is managed with the maker-checker ability on the platform itself.
Who are Credgenics clients?
Within just a couple of months from its inception, Credgenics could demonstrate a strong product market fit. At present, over 50 lenders are using the platform, which includes 7 banks with notable names like ICICI, Axis and HDFC and more than 40 NBFCs, such as LoanTap, Drip Capital, Udaan, DMI Finance, among others. In the last three years we have managed to grow our MoM by 80–100% and have been able to successfully deliver on the promises to our clients, while onboarding more and progressing in the journey.
Could you provide us some data around NPAs size Indian banks dealing at present?
Bad loans and lost assets has already been a matter of grave concern for the financial sector. While the situation is less severe with the banks, the under-regulated NBFC segment faces the brunt more. The liquidity becomes questionable, which impacts the performance of the creditor. With the recent data on job loss situation, where the percentage is as high as a more than 20% steep rise, the ability of the borrower to pay the EMI on schedule is also a worrisome aspect. Having said that, though we do not have the present data, but in the beginning of the year, the NPA was already at a monstrous high of 14%. The one thing that could be of help here is to improve the digital structure in the bank and legal sector and expedite the lending and recollection with due sensitivity towards the borrower. With reduced processing time and rate of investment, the benefit will also be seen in better financial inclusion. In any case the said crossing of the $100 billion mark of digital lending has to be facilitated, while ensuring that the NPA does not steepen and better regulations are in place for the digital lending segment.
What do all Credgenics have to offer to its clientele?
Credgenics offers the clients two solutions — one where the creditor can purchase our software and undertake the rest of the process, second is the end-to-end recovery where the entire process from data management to Online Dispute Resolution and litigation processes are undertaken by our designated teams. The process that begins with the data integration and management on the platform, moves to generating actions using automated rule defining widget, and then approaching borrowers using any of the five modules, such as cloud-based calling, automated communication, and field executive android app for on-field collection, legal notice, and litigation workflows. The communication and solution for each client and the borrower gets personalised. The dashboards are equally personalised to reflect the tracking of the case, so that the next best step is decided and implemented. All of this put together, makes the platform a one-stop-solution for the debt recovery woes.
Are there any expansion plans?
With our recent Series-A funding, we will fuel our international expansion to Middle-East countries and other interested geographies in the near future. Apart from the geographic expansion of our services, we would also like to work on better and widespread collection process that would enable us to work in the technologically less empowered areas. Our focus is also on making our products better and expand the offerings to cater to the growing recollections demands and requirements, which also includes developing a sturdy team ever ready to overcome the problems and present solutions to the lending ecosystem.