Feb 27, 2025

WhatsApp becomes the preferred platform for digital loan recovery SECTIONS By Rate Story Synopsis Industry insiders said that with WhatsApp becoming the popular mode of communication, debt collection startups like Credgenics, Spocto and others are increasingly using the platform as a reliable communication channel with their borrowers. Reuters Instant messaging platform WhatsApp, typically the favoured choice of communication for promotional and marketing messaging, is increasingly being used by fintech lenders to collect repayments from loan defaulters . Trump-Modi Meet Industry insiders said that with WhatsApp becoming the popular mode of communication, debt collection startups like Credgenics, Spocto and others are increasingly using the platform as a reliable communication channel with their borrowers. While collection messages by field agents sent over WhatsApp are common, it shows there is personal data leakage happening for borrowers, said industry insiders. Organised players are trying to institutionalise the reach-out to defaulters through integrations with WhatsApp for Business or through chatbots. "The charges for messages under the utility and operations category on WhatsApp have been slashed 50%, now a single message costs around 12 to 15 paisa," said Rishabh Goel, cofounder, Credgenics. To stuff in the same amount of information into an SMS would end up costing around 35 paisa, he added. ETtech Industry insiders said that it is not only about the cheaper prices, but also about the higher engagement seen on WhatsApp especially among tier one or tier two customers. It can be tracked whether the customer has read the message, it is easier to embed a payment link with some additional details so that the customer who is willing to make the payment can immediately undertake the transaction. Credgenics has its own payment stack integrated with NPCI Bharat BillPay run Bharat Connect platform to process loan repayments. Debt collection firm Spocto X, which was acquired by Chennai-headquartered Yubi in 2022, is using both WhatsApp messaging and chatbot 'Bhaasa' to undertake conversations around debt counselling. Gaurav Kumar, founder of Yubi, said that customer preference for messaging has shifted to conversational bots leading to collection platforms to adopt them more widely. "If the customer is employed, email remains an effective means of engagement, with high open rates. Otherwise, we are seeing a higher degree of engagement on bots and WhatsApp," Kumar said. Kumar believes that bot calls are the future, while phone calls via interactive voice response are cheaper, the sheer volume of spam calls an average customer receives daily significantly increases the chances of calls going unanswered." A top executive at a fintech firm also pointed out that WhatsApp as a platform gives the additional control over the user behaviour, what time of the day he or she opens the app, tracks messages, how much they read, everything can be understood over this platform. Kumar added that WhatsApp as a messaging channel is allowed, but calling over WhatsApp is not the right thing to do. Industry estimates suggest that the lending ecosystem spends around ₹50,000 crore yearly on retail collections and this amount is growing 10-15% year-on-year. Currently, the digital collections will be about 8 to 10% of the ecosystem. The 'collections' industry is slowly getting organised and regulated and industry insiders believe that more and more lenders will try to work with organised players in this space. Read More News on