Responsible Debt Collection in Emerging Markets

Emerging market economies have been experiencing high credit growth and high delinquency rates amongst retail banking customers in recent years. However, collections practices have not always kept pace with this rapid growth; many collectors still rely on relatively unstructured processes and weak oversight frameworks. It is therefore important to consider how fair and ethical treatment of borrowers can be better promoted in these markets.


To this end, IFC commissioned Oliver Wyman to study existing global retail debt collections practices in emerging markets and recommend tangible actions that lenders and collectors can take to promote responsible and ethical standards in the field. The conclusions of this study are based on field research conducted by IFC and Oliver Wyman, industry experts’ analysis and opinion, and a survey of institutions in 20 emerging markets.


Overview of practices observed

The report finds that while the collections landscape varies widely across emerging markets, there are remarkable similarities in challenges faced. Across the board, the study finds potential for positive interventions in regards to governance, processes and monitoring. It also debunks the myth that there is a trade-off between collections controls and collections effectiveness.  On the contrary – adopting disciplined approaches to collections can actually provide substantial uplift in effectiveness while at the same time reducing potential conflict points.

This report intends to make lending institutions aware of practices followed across emerging markets, and draw from the presented recommendations and case studies to strengthen their collections processes, promoting greater ethical practices tailored to their respective lending environments.  


Download full report.


IFC's Access to Finance Global Risk Management Advisory Program would like to acknowledge and thank the Government of the Netherlands for their contribution and partnership in the program and report.