Taking AI to debt collection as credit stress hits millions

South Africa’s growing debt burden is now creating an unexpected opening for artificial intelligence (AI), with some consumers appearing more willing to discuss overdue accounts with an AI voice agent than a human debt collector. Bruce von Maltitz, CEO of customer engagement technology company 1Stream, said debt collection carries an emotional burden that often becomes a barrier to engagement. The company has developed Agentic AI to handle the dreaded calls.

“Debt is a difficult topic to address under the best of circumstances. When debt becomes overdue, or the topic then moves to debt collection, things become even more difficult – practically and emotionally,” he said. South Africans are struggling to keep up with their financial obligations.

Researcher Eighty20’s latestCredit Stress Reportfound that around 40% of the country’s credit-active population is more than three months in arrears on at least one loan. Credit bureau TransUnion recently reported that about 35% of consumers expect to miss at least one bill payment during the current cycle. It’s sector peer, Experian, recently reported a default rate of 15.77% on retail credit products, with more than 22 million retail credit accounts currently active in South Africa.

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Missing a payment is stressful enough. Explaining it to a stranger on the other end of a collections call can make it even worse. “There are people who have serious financial problems leading to defaulting, but there are also many cases where a debit order simply didn’t go off because of a mistake, or a payment was missed and the customer fully intends to pay,” Von Maltitz said. “In those instances, you often need a fast, consistent way to notify the person and help them resolve the issue.” He said operational data from South African contact centres using voice automation or Agentic AI suggested that some consumers are more comfortable engaging with an AI system during these initial conversations.

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