3 Ways in which Collections can Help Consumers during these Pandemic times.

Even though the lockdown, for the most part has started to ease up around the country, we all know that the issues pertaining to the Covid-19 Pandemic are far from over. Many jobs have been lost, businesses shrunk or closed, and the economic outlook still looks glum to say the least.

It is imperative that lenders adopt a radically different approach to collection, than what has been the case in the past.

Not only do they need to be more empathetic towards their borrowers, but also deploy the tools of digital communication and technology, to actively help their borrowers find their way out of this challenge.

So here are the 3 ways in which businesses can not only help their borrowers, but also use this pandemic to bring about a paradigm shift in how collection is done.

Keep the Communication Lines Open -

Communication is the most important factor. Your Borrowers have to know that they are seen and heard. Your mission has to be to help borrowers navigate through the challenges they’re facing. Especially in times like these, where pretty much everybody is affected in some or another way.

This is where the tools of digital communication such as interactive email/WhatsApp/IVRs can help a great deal.

Send out non-collection related communications -

One of your Primary goals has to be to Educate and Empower borrowers…Help them understand how they can manage their debt well and how you can help them achieve their debt-management goals.

Not every communication you send needs to be about the loan in question. Send out educational and engaging content in the form of emails, blogs etc., which add value to your borrowers.

In the end, an educated and well informed customer is more likely to make timely repayments than an uninformed one.

Give Borrowers the Power to Manage their Debts -

The integration of digital collection tools into your business can make a tremendous difference in terms of empowering and educating your borrowers. Online portals and payment systems give your borrowers the same ease of access they had while taking the loan, particularly through the digital platform.

Ideally, digital tools should extend beyond just payment options and should include opportunities for consumers to:

• Make adjustments to the length and amount of their payment plans
• Skip or defer a payment without losing a settlement
• Dispute all or a portion of their debt
• Apply for hardship pauses
• Enter bankruptcy information

All of the above should be possible without having to speak to a collection agent.

The best debt collection practices should prioritize consumers’ needs and enable them to control their finances. It’s critically important to provide consumers with flexibility and the ability to customize when and how they pay.

Many people under debt, especially right now, have very tight budgets, some are living on their savings, some are living paycheck to paycheck, and sometimes are forced to choose between basic needs and paying dues.

A display of genuine compassion and empathy for those in need can make a lasting impact on borrowers and creditors alike.