As profitable as Nigeria’s consumer lending space appears to be, many fintechs are crumbling under the weight of delinquent loans. As a result of this, loan recovery teams are becoming larger, yet this presents its own set of challenges. Not only do large loan teams chip away at the profits of the fintech lending companies, they are also prone to several types of risks.
There’s the risk of rising remunerations, which erode profit margins. There’s the risk of hitting a dead end when the defaulters disappear without any trace. There’s the hidden cost of the logistics involved in seeking out defaulters.
There’s the emotional drain resulting from the fallout of aggressive confrontations between creditors and lenders. There are potential reputational and legal risks in the event that the actions of the credit companies are construed as intimidating the lender. There’s the risk of parties getting hurt due to the confrontation. There’s the risk of destroying relationships.
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