ScoreFast™ helped increase auto debt collections by 24%

by Nov 16, 2018Financial Services, Success Stories

Success Story

Finance: How ScoreFast helped increase debt collections for an auto finance company

Tata Motors Finance Limited (TMFL) is the financing wing of India’s largest automotive manufacturing company. They had a set of 120,000 customer accounts in collections, and the company was already facing losses on their accounts. Hiring more collectors would increase the collection totals, but any income would be offset by the cost of the collectors’ salaries. TMFL needed to optimize their collectors’ efforts by focusing on a subset of debtors that were likely to pay.

ScoreFast™ ingested 2 sources of data- payment history and call records. After exploratory analysis and several rounds of testing, a Generalized Linear Model was chosen. Some factors considered in the model were if the debtor had recently made a promise to pay, gross amount owed, total number of contact attempts. The output is a ranked list of the debtors in decreasing order of propensity to pay, which are then grouped into deciles.

 

TMFL collectors prioritize debtors in the “top 3” deciles (top 30% based on likelihood of paying), and then work their way downwards from the list. As of October 2018, 70% of all collections come from the top 3 deciles. Average monthly collections went up from $73,000 to $93,000.

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