6 Ways Outsourced Teams Fuel Success in Mobile Lending

You’ve probably heard of Tala, Branch, Zenka, Okash, and other reputable micro-lending firms. Some of you have even been beneficiaries of their loans—though I bet a few of you are still dodging repayment calls, not wanting to talk to their agents.

But hey, that’s not today’s topic! Let’s talk about how these companies manage such massive workloads and still turn a profit. Because, let’s face it, no one stays in business without making some serious cash, right?

Here’s how outsourced teams contribute to the success of mobile lending companies:

1. Specialized Debt Collection Services

Many Fintech companies outsource their collections to specialized BPO providers that focus on debt recovery. These BPOs have the expertise, tools, and manpower to handle collections efficiently. Since debt recovery requires specific legal know-how and can be resource-heavy, outsourcing allows lenders to rely on experienced professionals. These teams are skilled at negotiating repayment plans and even taking legal action when necessary.

2. Cost-Effective Operations

Outsourcing collections helps mobile lending firms avoid the high costs of maintaining internal debt recovery departments. In Kenya, labor costs in the BPO industry are competitive, allowing lenders to save money while maintaining high-quality services. By working with BPOs, companies like Tala and Branch avoid the expense of recruiting, training, and managing large in-house collections teams, resulting in significant savings.

3. Focus on Core Business Activities

By outsourcing collections, mobile lenders can focus on what they do best—issuing and managing loans. Collections management is time-consuming and can divert attention from core business functions. With a BPO handling the heavy lifting, these firms can allocate more resources toward improving their products, growing their customer base, and scaling their operations.

4. Scalability and Flexibility

One of the biggest perks of using BPOs is scalability. As mobile lending companies grow, so do their collection needs. BPOs can easily scale their services up or down, depending on the volume of loans and defaults. This flexibility means lending firms can handle fluctuating demand without the burden of hiring and managing additional internal staff.

5. Customer-Centric Approach

Many BPOs specializing in collections focus on a customer-friendly approach. They understand the value of maintaining a positive relationship with borrowers, even when they are in default. This often involves negotiating flexible repayment terms or providing financial advice, helping borrowers avoid feeling alienated. A more customer-centric approach typically leads to higher repayment rates and greater customer satisfaction.

6. Data and Reporting

Outsourcing collections also comes with the added benefit of detailed data and reporting. BPO providers use advanced tools to track borrower behavior, payment trends, and the overall effectiveness of their collection efforts. This data is shared with lending firms, helping them refine their lending criteria, adjust risk management strategies, and improve overall operations.

Now you know exactly how BPOs play a crucial role behind the scenes for mobile lending companies. From handling debt collections with finesse to providing cost-effective solutions and valuable data insights, these outsourced teams allow fintech firms to stay focused on their core business. So, next time you see those loan apps booming, remember it’s not just about the technology—there’s a whole team of experts making sure everything runs smoothly.