Increasing inflation, interest rates and indebtedness is causing a credit squeeze for millions of South Africans.
Now CMS Group, one of the leading specialist debt collection service providers, has increased its Durban call centre to 150 seats since its establishment late last year due to "increasing demands" and following the take-on of Woolworths and another major retailer's credit books.
The expansion of the call centre – which represents and investment of "hundreds of thousands of rands" by CMS Group -was also necessitated due to the current economic environment.
Says Andrew Grant, regional head of collections at CMS Group: "The credit market has entered the perfect storm. Hardly a month goes by without some financial report focusing on rising consumer indebtedness and the increasing economic severity.
"As interest rates continue to rise, leading property analysts are reporting that thousands of homeowner are now facing the prospect of losing their homes or having to scale down dramatically as rising costs take their toll.
"New legislations surrounding credit debt also resulted in a significant growth in debt delinquency and banks, financial institutions and retailers are looking at ways to manage and curb rising consumer and business debt."
Grant says that, while CMS Group boasts established operations in Johannesburg and Cape Town, there was a growing need for a larger national footprint. The call centre in Durban opened in September last year with a staff complement of 28, tasked mainly to assist with Woolworths' card collection operations. It took just seven weeks to set up operations.
Earlier this year, however, its mandate with Woolworths was increased due to its higher level of successful collections. The Durban branch was also recently appointed to collect a "sizeable chunk" of a further retailer's book after a successful trial at one of their chains.
This necessitated the rapid expansion of the call centre, which is now manned by 105 staff members. Total branch head count has grown to 156.
The company is working on the client's VisionPlus software platform, which enables the client to have a real-time view of its customers.
"It gives us a fingertip, birds-eye view of all in-store operations without us having to download any data from our clients," he says.
The call centre has the capacity to add a further 100 seats, with 32 additional seats being added "during the next month".
"Given the current state of the economy this translates into increased volumes for credit management specialists. Our margins are lower, but we are seeing our book volumes increase dramatically.
"Companies are increasingly looking at ways to control spiraling debt and to avoid increasing delinquency. Many are realising the benefits of making use of specialists, hence the phenomenal growth of our business."
According to the National Credit Regulator there are more than 17-million active creditors who currently owe a total of R1-trillion. More than 6.5 -million consumers are currently black-listed at credit bureaus and as interest rates, food and petrol prices continue to rise, this figure is set to worsen.