“While the process of lending and distribution has witnessed a rapid pace of digitization, the same does not reflect in the process of debt management,” says Nitin, the CEO and founder of Medius AI. Talking about the origin of the idea, he adds, “During the first Covid wave, the RBI had imposed a 6-month moratorium which was a breather to several borrowers who lost their source of income. As per RBI, 40% of all bank loans—worth Rs 38,68,000 crore ($523.4 billion)—went under moratorium. However, once the moratorium was officially lifted on Aug 31, millions of Indian borrowers had collection agents who went arm-twisting them into paying back their loans. The borrowers had the intention to pay up but had their hands tied due to situational stress. I figured out that collection & recovery processes have remained outdated for decades, and coming from a technology background, I could only think of ways that banks could do this better was by leveraging AI & ML.”
Nitin further explains, “With the whirlwind pace of development in the Indian economy, the volume of credit has gone up too. Unfortunately, so has the delinquency. If the current data is to be believed, the NPA level was predicted to increase from 7.5 per cent in 2021 to 9.5 per cent by September 2022. These bad debts will ultimately come down heavily on the banks, and by extension, the funds of millions of customers associated with these banks. Medius AI uses AI-powered behavioural analysis and predictive algorithms to determine if a delinquent account will recover on its own, fall further into delinquency (regardless of what we do), or fulfil the payment if correctly treated. Then, using machine learning models, the conversational AI is trained to collect the debt appropriately."