US credit card defaults good for India

Declining fortunes of the US and the UK consumer are proving to be a boon for India’s outsourcing industry. Companies in India are increasing the size of debt collection and recovery units to handle the increased demand.

Firstsource, an Indian business process outsourcing company that handles credit recovery for most of the top five US banks and half of the top 10 credit card issuers, said it was increasing staff numbers to win business from growing credit card defaults in both national markets. (FT)

Ananda Mukerji, Firstsource chief executive, is quoted as saying that he is willing to add 100 more people overnight to meet the increasing demand for that service.

Thanks to the rising unemployment, and higher food and fuel prices overdue accounts at the six large US credit card issuers increased in June. The worst affected issuer in June was American Express with loans overdue by 30 days rising by 16 basis points to 3.21 per cent.

Outsourcing companies usually deal with accounts that are 90-180 days overdue. The post-360 days overdue work, which often involves legal action against defaulters, is normally performed by agencies with a greater local presence.