Indian Debt Collection Operations Growing for U.S. Clients

Debt collection outsourcing firms in India are enjoying a spike in placements from their U.S.-based clients as more Americans default on their credit card debt and issuers look for cheaper channels to recover the loans.

British business publication The Financial Times spotlights one of the largest Indian BPO firms that offer debt collection services to U.S. clients, Firstsource. Since 2004, Firstsource’s staff of collectors that caters exclusively to U.S. debt collection has risen from 250 to 600. In the same time, revenue from collections has risen from $20 million to around $50 million per year.

“There is more demand for that service. If I could add 100 people today, overnight, I would do it,” said Ananda Mukerji, Firstsource CEO, told the Financial Times.

Many in the Indian BPO market attribute the spike in collection placements to rising delinquency and charge off levels among U.S. credit card consumers.

The head of another large Indian BPO provider echoed the comments made by Firstsource.

“We have seen some ramp-up on the collection side,” said Amitabh Chaudhry, chief executive of Infosys BPO, told the Financial Times.

Chaudhry explained that debt collection outsourcing work is making up for some of the lag in other BPO services, such as IT support, that many large Indian shops are seeing as the global economy cools.

Regardless of placement levels, Mukerji notes that debt is becoming more difficult to collect in the U.S., echoing what many in the American accounts receivable management market have been saying for the past year.