The Debt Collector Ep #2
As a company that is set up on the foundation of empowering aspirations, we continuously strive to maintain transparency on our platform. Over the last few months, we have been looking at how we can further improve the information we share with investors regarding delinquent loans. Just like any other investment, marketplace lending entails risk. Investors can mitigate this risk by having a diversified portfolio. The Investment Health Bar on the dashboard is one feature we built to have a better overview of your investments. In our efforts to continue to improve communications about our debt recovery process, we will be sharing some of our experiences in this light-hearted series – The Debt Collector
Recap: A media company received funds from 48 investors in May 2016 and missed a payment in November the same year. In December, we demanded full repayment after learning that a leading bank had filed a bankruptcy (notice) against the company’s director.
In December, we did not receive anything from the company. They also missed that month’s installment.
We were now facing two months of delayed payments, an unresponsive director, and anxious investors.
With the determination to recover the entire loan amount for our investors, we continued with our recovery efforts.
After an internal investigation, we found that the bankruptcy application by a leading bank was the result of a default in payment. This required us to terminate our Promissory note and demanded full repayment. We also informed the company that if we did not hear from their director, we would be forced to inform their business associates about the bankruptcy application.
This stern letter got us a reaction. The director who was avoiding our emails and calls wrote to us and likened our professional approach with loan sharks! Can you believe it?
We used this opportunity to get on a phone call and explained the implications of the company and its director’s actions. The discussion was polite, professional and cordial. We assured the director that our demands were necessary and that avoiding calls and emails is not the best way to instill confidence.
After the discussion, the director made a small payment and appointed an advisory to manage their credit payment plans. That was a good decision!
The company paid all outstanding amount on time every month until the end of the loan tenure.
Our investors got back their invested amount and earned a 17% nominal interest rate as well as an additional late interest amount.
At the end of it all, we were happy that we could provide timely financing to the SME, managed a delayed payment situation and delivered to our investors – their return on investment.
Don’t miss our next story about a logistics company defaulting on its loans.