MFI borrowers operate in Self-Help Groups and Joint Liability Groups – the loan was approved on the group’s trust in each other, and the group’s willingness to repay depends on that same trust staying intact. A pressure tactic applied to one member doesn’t stay contained to one account. It damages the entire center’s repayment behaviour.
Most agencies offering microfinance debt collection services apply the same script used for NBFC or bank recovery – a mismatch that in the worst cases can trigger the kind of group-wide repayment breakdown the sector has seen before. A genuine microfinance recovery agency treats group dynamics as part of the strategy, not an obstacle to it.