Mastering the Debt Recovery Process in Kenya

In Kenya, the debt recovery process involves several steps and considerations to ensure legal compliance and effectiveness. The steps are as outlined below:

Issuance of a demand letter

This basically entails making a demand to the debtor to pay the outstanding amount by way of a letter. Making a demand to the debtor gives parties an opportunity to deliberate on suitable payment modes thus, maintaining relationships. Further, issuing a demand letter before approaching court is increasingly important since a demand letter is enlisted amongst the documents that accompany a suit under Order 3 Rule 2(d) of the Civil Procedure Rules, 2020.

Instituting a Debt Recovery Suit

Where a debtor fails to comply with the requirements of a demand letter, the next step would be to institute a suit in court. One needs to consider the pecuniary jurisdiction of the claim so as to determine where the suit ought to be filed. Where the debt is below 1 million, the suit is filed in the Small Claims Court, where the suit is above Kshs. 1,000,000/=, the claim is filed in the Magistrate’s Court depending on the jurisdiction as set out in the Magistrate’s Court Act or in the High Court where the debt exceeds Kshs. 20,000,000/=.

Post-judgment Debt recovery

Where a court of competent jurisdiction determines that a debt is indeed owed to the creditor (Decree holder) and orders the judgment debtor to pay the debt owed, the creditor should proceed by extracting a Decree in court and making a demand to the judgment debtor. If the debt is not paid within the time specified in the demand, the Decree holder may proceed to instruct Auctioneers to apply for warrants of attachment and sale of the judgment debtor’s property.

In cases where the Auctioneers are unable to attach the judgment debtor’s property, then the Decree holder may utilize any other modes of execution as prescribed under Order 22 of the Civil Procedure Rules, 2020. Such modes include instituting garnishee proceedings where the judgment debtor’s bank accounts are known, applying for an order of examination of a judgment debtor as to his property, attachment of agricultural produce, attachment of salary, attachment of partnership property, applying for a notice to show cause why the judgment debtor should not be arrested, amongst others.

Recovery under the Movable Property Security Rights Act, 2017

The Movable Property Security Rights Act was enacted in 2017 to facilitate the use of movable property as collateral for credit facilities. A security right is created by executing a security agreement provided that the grantor has rights in the asset to be encumbered. Where there is default of any secured obligation, the secured creditor shall serve upon the grantor a notification in writing to make good the debt owed or to perform any other obligation. Where the grantor fails to comply with the demand, the grantor may proceed to recover the debt owed as set out under section 67(3) of the Movable Security Rights Act, 2017 through any of the following modes: suing the grantor, appointing a receiver of the movable asset, leasing the movable asset, taking possession and selling the movable asset.


In conclusion, navigating the complexities of debt recovery requires a meticulous understanding of both legal frameworks and practical strategies. By adhering to established procedures and leveraging legal remedies judiciously, creditors can enhance their prospects of successful recovery. It is imperative for all parties involved to uphold transparency, fairness, and compliance with regulatory guidelines throughout the process. Moving forward, continuous adaptation to evolving laws and industry practices will be essential for maintaining efficiency and effectiveness in debt recovery efforts. Ultimately, a balanced approach that combines legal expertise with strategic negotiation remains pivotal in achieving favorable outcomes for all stakeholders involved in the debt recovery process.

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