When people think about debt recovery and debt collection in the Nigerian context, the image that comes to mind is one of harassment: the use of thugs to intimidate, incessant calls to shame and threaten, and sometimes the use of security agencies to imprison defaulters. Despite this, loan app advertisements continue to flood the internet, and Nigerians continue to borrow more.
This is the industry that DebtRecuva has chosen to play in. According to co-founders Peace Obule and Gafar Iyowu, DebtRecuva is a tech-based solution to the problem of debt collection. With an app-based framework in major Nigerian cities, DebtRecuva aims to help financial institutions with address verification and loan collection processes.
But it didn’t always start that way. In the beginning, DebtRecuva was just an idea between two best friends who wanted to change how the debt collection industry worked for the better.
This is the story of DebtRecuva.
Day 1
DebtRecuva was born out of a dissatisfaction with how debt recovery worked. Peace Obule and Gafar Iyowu, best friends since secondary school, who both worked in financial institutions—Obule as a business development expert, and Iyowu as a risk management expert—decided to take DebtRecuva to the market after being ghosted by a potential client.
“It started out as a project for someone who had asked for our assistance, and then when there were issues surrounding the execution, I spoke to Peace and we decided to make the project our own,” Iyowu says.
The initial setup was lean. The “office” was the two founders and three initial employees. The technology was a spreadsheet, and the strategy was sheer persistence. Before they automated their processes, every single step had to be done manually.
“In the beginning, it was extremely mechanical,” Obule recalls. “Manual means that if you have a list of 300 people, you have to dial their numbers on your phone physically. Imagine calling 300 people in a day, the headache was out of this world. Sometimes we’d get a list of 2,000 people we were supposed to call in one week.”
Their first clients came from their network in the financial industry, attracted by a risk-free proposition— DebtRecuva only got paid a percentage of what they successfully recovered. “The client would say, ‘You know what, we have nothing to lose,’” Obule explains. “So let’s give you the accounts. If you don’t recover anything, you don’t get paid anything. So that’s a win-win.”
The core of DebtRecuva’s disruption lies in a simple but radical shift: treating debtors as customers, not criminals. They systematically categorised defaulters into buckets based on willingness and capacity to pay.
“There are customers who are willing to pay but have capacity issues. Some customers are unwilling to pay, but they have the capacity to pay,” Obule explains. “Harassing the first one doesn’t work because he doesn’t have the capacity, except you’re going to kill him.”
For those willing but unable, empathy took tangible forms. “We’ve helped people secure jobs. We’ve collected CVs from certain customers, passed them along to people within our network that needed them, and they’ve gotten jobs,” says Obule. “And what happens when they get those jobs is that they prioritise our payments.” This long-term relationship-building stood in stark contrast to the industry’s short-term threats.
For the unwilling but able, the strategy became “moral persuasion” and financial literacy, educating them on the real-world implications of a damaged credit history. “We discover that they require a lot more education. It’s what we’ve done in the market,” Obule notes. “Harassing the customer doesn’t feature in our strategy.”
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Day 500
As their client list grew, the manual Excel process became unsustainable. Their first major evolution was building a proprietary collection software that integrated directly with clients’ systems via API.
The platform became the engine of their empathy-driven model. “We’ve built in a lot of algorithms that help put customers in different strategic buckets automatically,” Iyowu explains. The system uses predictive analytics to estimate a customer’s likelihood of paying and routes them to the appropriate communication flow. “There are some customers you don’t even need to call. Just send them an SMS. They know what they are doing.”
To bridge the digital divide and reach customers who are offline or unreachable, they’ve built a network of field agents armed with a mobile app. These agents across various local governments can have face-to-face, empathetic conversations, with all data syncing to HQ in real-time.
Scaling from 5 to over 100 employees in four years, and moving from a small mainland office to their own headquarters, posed the biggest challenge: how to institutionalise empathy. The solution was a multi-layered system of quality control. A dedicated Quality Assurance (QA) team listens to agent calls in real-time, empowered to “barge in” if a conversation veers towards harassment.
“Where there’s no law, there’s no sin,” Obule says. “We’ve told you, don’t harass the customer.” To prevent agent burnout, their AI-powered software suggests empathetic, effective scripts during calls. “We’re aware of how stressful the concept of making constant calls throughout the day is, so we developed an algorithm with scripts depending on the customer. The AI is already assisting you on what to say, so you don’t need to be burnt out,” Iyowu adds.
Day 1,000
Bootstrapped and profitable, DebtRecuva is looking to the future. They have begun speaking with investors to fund a pan-African expansion, framing their company not as a mere collector, but as a vital sanitiser of the financial ecosystem.
“What we are trying to do every day is to help individuals come out of financial burden,” Iyowu states. “It’s beyond just owing money. It’s the ripple effect it has on families.” He sees their role as rehabilitating borrowers. “By the time you finish servicing your loan, you are much more financially literate. We are cleaning the credit ecosystem.”
Reflecting on the rollercoaster of their first 1,000 days, both founders share a common reflection. “I would say we should have started earlier,” Iyowu admits, seeing the business as a way of life.
Obule echoes the sentiment, acknowledging the immense hardship. “Entrepreneurship is hard. You will cry at night, and there are days you don’t know how to pay salaries,” he says. “But my advice is to start now. Start early. You need to learn from the process early; let’s keep pushing.”
