Bad loan? India firm sends in the women.

• A local, slice-of-life story from a Monitor correspondent.

What’s a bank to do when a person defaults on his loan payments, doesn’t respond to legal notices, and isn’t intimidated by tough talk? Send in the women.

Traditionally, the modus operandi for loan recoveries in India has been simple: intimidation, threats, and violence. This creates bad public relations for the companies and headaches for law enforcement.

But now, a loan-recovery agency is using a different technique: persuasion, not persecution. Instead of armed goons, they’re using the patriarchal Indian culture against men by sending in soft-spoken women.

“In India, men often find it humiliating that a woman has come to them asking for money,” says Parag Shah, the managing director. The agency, Adhikrut Jabti Evam Vasuli, (Vasuli, for short), the first and only one of its kind, uses this fact to its advantage. Started in 1998, the agency has employed female recovery agents exclusively.

As the global economic crisis puts the pinch on pockets, firms around the world are finding interesting ways to collect. One debt collector in Spain uses public shaming a tool of coercion.

Vasuli now has operations in 10 Indian states, employs more than 200 agents, and recovers approximately $6 million to $10 million for the nationalized banks annually.

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