Relentless phone calls, threatening texts, and harassing borrowers’ social circles – for a time, these were the most common tactics for debt collectors in China to obtain delinquent payments. As the role mostly involved more simple and direct techniques, a high school diploma previously sufficed as an educational minimum.
But now, Chinese banks are actively recruiting for in-house debt collection teams with much higher standards in place.
Last month, Sanxiang Bank – a private bank based in the central province of Hunan – published a recruitment announcement for a “senior debt collector” on its public WeChat account. Successful candidates, it said, should hold a bachelor’s degree and come from a background in finance, accounting, management or law. What’s more, the bank also required at least five years of work experience and a firm grounding in data analysis.
Commercial banks, including China Everbright Bank, Bank of Communications and China Merchants Bank, have published similar advertisements for their own staff.
Professional debt collection processes would help a bank protect its reputation
According to the guideline, financial institutions must now establish dedicated teams for debt collection led by a senior manager. Debt collectors are also forbidden to contact debtors during unsociable hours, defined as before 8am and after 10pm. Additionally, they can only make three calls to a given person per day and are strictly forbidden from harassing their contacts.
Based on the job description, senior debt collection staff recruited by Sanxiang Bank would be responsible for management and administration – analysing data, developing a workflow and laying out effective strategies. The bank is also looking for senior managers to oversee the process.
This emphasis on data analysis and strategy development is echoed in the other job postings from commercial banks and internet financial service companies.
“Professional debt collection processes would help a bank protect its reputation from inappropriate debt collection efforts,” said Ryan Tsang, managing director at S&P Global Ratings. “Banks are making efforts to improve the risk selection process, balancing risk and return.”
As of June 27, the total number of “judgment defaulters” – those who are unable or refuse to pay back loans – was 8.3 million, up 47 per cent compared to the beginning of 2020.
Real estate, construction, retail and manufacturing are the four main sectors where the pressure of non-performing loans has been most conspicuous, and Tsang said overdue credit card advances have been pressuring banks’ retail lending book quality for a few years.
