The outbreak of Covid-19 propagated enormous instability and volatility in the financial services sector. While FinTech had brought about an irreversible digital revolution much earlier, the pandemic has firmly established digitisation as the industry’s substratum going forward. One of the most severely impacted subsets of this sector that continues to function on traditional offline practices is debt management. The pandemic has had a cascading effect on the people’s finances, and thereby their debt repaying capacity. This has, in turn, translated into a massively growing NPA crisis, costing the Indian economy dearly. Like all complex problems in today’s world have found a solution in technology, here too, the answer lies in digitising the obsolete, physical modes of debt management.
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Nitin Purswani recognised the critical need to harness technology to improve the collection and recovery process and founded Medius AI, a collection intelligence platform. Nitin is a FinTech enthusiast and passionate entrepreneur with the vision and expertise to reduce non-performing assets and bad debts while helping banks to eliminate operational and administrative issues associated with debt collection.
“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 I figured out that collection & recovery processes have remained outdated for decades, and coming from a technology background, I could only think of ways that banks could do this better was by leveraging AI & ML.”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."
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The new-age start-up, which was launched in 2021, has already partnered with some of India's major banks and NBFCs to manage a delinquent portfolio worth over INR 500 crores. Medius AI has seen a 3x increase in revenue and has assisted banks in recovering 17 percent more NPAs. The platform's cutting-edge technology has been successful in handling a wide range of loans, including home loans, auto loans, personal loans, agricultural loans, and business loans. In terms of capital, the start-up is still totally self-funded and self-sustainable, with Purswani owning 100% of the company.
Talking about the future roadmap, Nitin says that technological innovation corresponding to customer needs will always be the vision of Medius AI going forward. "Our fundamental strength now is data analysis to forecast consumer behavior and maximize customer interactions," he explains. We aim to fast-track the collection process while minimizing the friction. Our workflow has been built to brace the impact of a tremendous scale of default efficiently. Through our digital, omni-channel approach, we have been able to achieve the desired results from 9 out of 10 of our consumers currently. Our goal is to radically revolutionize how debt collection and recovery operations currently operate and to limit the economic effect of bad debts."
For more details, please connect: www.themedius.ai.
