Disrupting debt collection?
Lending money out is easy, the hard part is to get the money back. Could debt collection startups offer the tech solution financial institutions need?
There has been an exuberance in lending, partially driven by the fact that – since a few months ago – money capital was free and abundant with interest rates near zero or negative.
Rising interest rates driven by ramping inflation and economic slowdown are putting pressure on debt financing and bringing attention back to debt collection processes. We have seen the fall of many BNPL providers with bad debt percentages up to 20%.
While hundreds of billions of dollars have been invested in the last few years in digitalizing financial services, debt collection operations remain very manual and archaic, resulting in frustration for customers and lost money for service providers. Startups in the segment have recently started to pick up steam attracting over $800M in VC funding since 2021.
These debt collection startups help on one hand lenders recover debt from personal borrowers and SMEs with digitally integrated workflow, ML & AI; and on the other hand, help borrowers deal with the repayment process.
Discover 50+ debt collection startups helping lenders and borrowers deal with the new economic climate.