With rising unemployment levels and falling retail sales, many South Africans are falling behind in debt repayments.
While this typically leads to customers who are quick to default, Richard Mukheibir, CEO of Cash Converters Southern Africa, said that the company is seeing unprecedented success in its debt collecting, with Cash Converters now boasting a success rate of two out of three loans clawed back from default.
The improvement has come thanks to better technology to track and follow up debt patterns among borrowers, said Mukheibir, and to the “make friends” approach introduced by Cash Converters Debt Collection Manager Adele Lewis, who joined the company early in 2016.
“We can see that most consumers intend to honour the debt that they take on,” said Mukheibir.
“The ‘credit criminals’ who take on debt with no intention of servicing it are few and far between. But all too often circumstances change and borrowers who had the best of intentions find themselves faced with demands on four credit agreements or loans and only enough cash in hand to pay one,” he said.
Lewis added that debt collection is very similar to sales and establishing a relationship with the customer was of vital importance.
“To make your debt is the one that the consumer chooses to pay when times are tough, you need to be listening to find out what works for both parties so you can keep the consumer in the paying cycle, even if that means reducing payments to R100 a month until the consumer’s circumstances improve,” she said.
Lewis said that the the company’s debt consultants are trained and mentored to build a “cradle to grave” relationship with the customer.
As a result, consultants are often greeted by name by “their” customers – “Hi, Alice, it’s you again”. In turn, customers often take the initiative to contact “their” consultant to say, “I’m ready to raise that repayment to R300 a month now.”
Adding WhatsApp to its voice and SMS customer-contact channels has further boosted the company’s customer-friendly approach and has also decreased the number of dropped calls when the call centre is at its busiest, said Mukheibir.
“Customers enjoy communicating with the company on the WhatsApp platform because it is more discreet than responding to a voice call about personal finances in the middle of an open-plan office, for example,” he said.
“If they are working shifts and can only communicate after hours, they can choose to respond whenever is most convenient for them, even if this is at 22h00 or 05h00.”
Mukheibir added that because all of the company’s debt consultants were registered to use this channel on the company’s behalf, it has increased their productivity as they can maintain five or six WhatsApp conversations at once – which would be impossible with a voice call.
“WhatsApp works for many customers while for others, it is an ice-breaker that leads us into a voice conversation or an e-mail exchange, whichever works best for them,” said Mukheibir.
“A friendly and understanding approach to collections brings a better debt outcome for customers and companies,” he said.