Digital transformation: E-lenders rely on tech, not recovery agents

The moratorium, announced in the wake of the pandemic, has put several digital lenders out of business, say people familiar with the matter

With the Reserve Bank of India (RBI) imposing strict rules on recovery agents and the moratorium delivering a body blow to their business, new-age digital lenders are looking to upgrade their credit assessment skills to predict defaults rather than act after the fact.

Digital lenders were earlier heavily dependent on recovery agents to get back dues, particularly in small value loans. But, with RBI getting stern in checking errant recovery practices, these lenders have started depending more on technology.

RBI, in November 2020, said lending organisations will be responsible for the actions of recovery agents, even if the agents are