On a January morning in 1997, AKM Ashraful Bahar, then a manager of Fair Guard, a security guard services company, went to Agrabad branch of the now defunct ANZ Grindlays Bank in Chattogram. Fair Guard had an account with the bank and so Bahar used to go there often.
Bahar grew close to some officials of the bank. On that particular day, Rais U Ahmed, a bank official, offered him to work for the bank as a debt recovery agent on a commission basis.
"I did not first understand what kind of task it was. It was a completely new idea. I asked him: how can I collect the money when you are failing in spite of being a bank official?" said Bahar, who was then a 25-year-old young man.
The banker told him that they sometimes could not reach customers over phone and they did not have enough manpower and time to remind clients about their debt by going to their homes or offices.
"Honestly, I was not that hopeful that we could get the money. I thought it was impossible," went on Bahar.
Some days later, the bank appointed him as a debt collection agent on a commission basis. The bank provided him files of five clients and told him to talk to them. He went to all five of them several times and reminded them of unpaid installments.
"I lucked out and found that they began to pay their dues. The bank transferred my eight percent commission on the collected money to my bank account," said Bahar, sitting at his Care Credit office in Uttara, Dhaka, which he set up the very next year as the country's first debt recovery agency.
ANZ Grindlays Bank later merged with Standard Chartered Bank in 2000. Care Credit is still working for Standard Chartered.
Currently, around 30 debt recovery agencies are operating across the city to recover bad loans for banks. They undertake the task for a certain amount of commission on recovered loans.
According to agency owners, they recover bad loans worth Tk1,200 crore annually. They work for both local and foreign banks.
Every month, Credit Care handles around 2,000 clients of Standard Chartered Bank alone. Of them, 70 percent is credit card-related default and the rest are personal loans.
"On average, we can recover monthly Tk1.5 to 2 crores. We even recovered Tk3 crore a month before the pandemic," said AKM Ashraful Bahar, chief executive of Credit Care.
To recover a bad debt from a defaulter is not an easy task for a bank. When a bank fails to collect the money from a client, it gives the task to a third-party debt recovery agency. The agencies recover loans in amounts ranging from Tk10,000 to Tk1 crore.
However, during the pandemic, monthly recovery has come down to less than Tk1 crore because of Bangladesh Bank's directives on loans.
"In most cases, the banks give us the clients' files when they fail to reach the client or the client is not answering the phone calls from the banks," said Bahar, adding that the commission depends on how long installments have remained unpaid.
At first, debt recovery agents try to get the client over the phone. If they answer the phone, then no one goes to their homes. Instead, they visit their offices.
"We even try to know a client's whereabouts using Facebook and WhatsApp," said Bahar.
"If they still show reluctance to pay the money we spell out the legal consequences," said Rokon Uddin Miah, who set up his debt recovery agency, Mars Financial and Legal Consultancy Limited in 2010.
"Banks have a lot of things to do. In general, they behave decently. What we do is to stick to a person. To remind him or her again and again," said Rokon Uddin Miah, claiming that their approach is civilised too.
"Our extra task is to stick to them to get back the money, that's all. It's simple," he added.
He said some people stopped paying back loans for years. They even forget that they have ever taken any loan in their life.
"In most cases when we remind people that they will have to pay the money back, they listen to us and understand the situation, and they pay the money back," said Rokon.
But there are some clients who do not want to pay the loans back. These people create problems.
"We have to handle these clients differently. We point to them the legal consequences," Rokon added.
Some allege that debt recovery agencies put pressure and harass people to pay the money back. Both Bahar and Rokon dismissed the allegation.
"We try to be very civilised in collecting money. Our experience is you cannot collect money by creating a scene," said Rokon Uddin Miah. "Our only task is to convince them to pay the loan back."
They said the minimum qualification for getting a job as a debt recovery agent is a secondary school certificate. They train their agents on how to behave with a client.
"If a recovery agent visits a client's office, he or she never tells a third person about the loan," said Bahar.
It is totally forbidden for agents to take cash from any client. The client will have to pay the money to the bank.
"We are working with international companies and we have to work in compliance with the rules of the banks. The banks have a reputation, we cannot damage their reputation," Bahar added.
The industry is not only recovering bad loans from defaulters, they are working with different banks on customers background checks before loan approval.
Rokon Uddin Miah, who set up his agency ten years ago, sees a bright prospect for the debt recovery agency industry in the country. He considers it a big industry as there are around Tk2 lakh crores of non-performing loans in the country.
"There is a big industry in India too," said Rokon, whose website claims to have around 20 banks as their clients.
He wants the government to formalise the industry which will ultimately stimulate the whole economy.
"If the government formalises the industry, then the loan takers will get a message that they will have to pay the money back," he said.