Allsec Technologies ties up with CompuCredit Inc
By Our Corporate Bureau | 12 Jun 2004
The two companies have entered into a strategic alliance under which CompuCredit — which is in the business of telemarketing, buying distress and bad debt portfolios of retail lending outfits and recovering money for them — will offer its services along with Allsec to other players in the retail lending domain.
According to CompuCredit's chief credit officer, KK Srinivasan, "Our expertise lies in managing credit portfolios and Allsec's expertise is in contact centre management. We will train Allsec agents in credit analytics and other necessary skill sets."
The agreement permits CompuCredit to buy into up to 20 per cent of Allsec's equity after three years. "CompuCredit buying into our company depends on the volume of business generated. They will be offered 20 per cent stake in our company provided the total volume of business touches $20 million," says Adi Saravanan, founder and president, Allsec. Saravanan, however, declined to reveal any other numbers like the company's equity base or turnover.
As of now, CompuCredit accounts for 35 per cent of Allsec's business. Out of its 1,200 agents, Allsec has deployed 500 to handle CompuCredit's business. With the strategic alliance now in place, the call centre company plans to increase its headcount further.
Speaking about the dynamics of the retail loan recovery business Srinivasan says, "One can buy a credit card bad debt portfolio for nearly 4 per cent of the loan value. The recoveries will be anything between 6 to 10 per cent of the portfolio size. If the portfolio is an ongoing / live one, then the recoveries are anything upward 50 per cent of the credit amount."
