Streamlining Asset Recovery for Microfinance Institutions
Our professional MFI asset disposal services are designed specifically for Microfinance Institutions (MFIs) and SACCOs in Kenya seeking an efficient, compliant, and profitable way to liquidate repossessed assets. When borrowers default on loans secured by assets like motor vehicles, boda bodas, or business equipment, the recovery process can be complex and time-consuming. Swipe Recoveries Experts Ltd simplifies this by managing the entire asset disposal lifecycle—from ethical repossession to public auction. We ensure every step maximizes your financial return while strictly adhering to Kenyan law, safeguarding your MFI's reputation and financial health.
Compliance under The Auctioneers Act & CBK Guidelines
The disposal of assets for MFIs is a highly regulated activity in Kenya, primarily governed by the Auctioneers Act (Cap 526) and the Auctioneers Rules. These laws mandate a strict procedure that must be followed to ensure the legality of the sale and protect the rights of all parties. This includes the issuance of a legally required notification of sale to the debtor, which must provide a clear redemption period before the asset can be sold. For chattels mortgaged as security, a 45-day notice is often standard practice before any auction can proceed.
Furthermore, as financial institutions, many MFIs fall under the prudential guidelines influenced by the Central Bank of Kenya (CBK), which demand transparency and sound practices in handling non-performing assets. At Swipe Recoveries, compliance is our priority. Our team, licensed by the Auctioneers Licensing Board, ensures every valuation, gazette notice, and public auction is conducted in full compliance with these statutes. This meticulous approach prevents legal challenges, protects the MFI from liability, and upholds the integrity of the recovery process.
Our MFI Asset Disposal Procedure: From Repossession to Sale
We offer a comprehensive, end-to-end service for MFI asset disposal, ensuring a seamless and effective process for our clients. Our procedure is transparent and structured for optimal results.
1. Instruction & Asset Recovery: Upon receiving formal instruction and necessary documentation (copy of loan agreement, chattel mortgage, proof of default), our team proceeds with the lawful repossession of the specified asset.
2. Valuation and Condition Report: The recovered asset is transported to a secure yard. A professional, independent valuer is then engaged to assess the asset and provide a formal valuation report, which helps in setting a realistic reserve price.
3. Statutory Notices & Advertisement: We issue all required legal notices to the debtor. Simultaneously, we execute a targeted marketing campaign to attract potential buyers. This includes placing advertisements in national newspapers like the Daily Nation or The Standard and listing the auction on our digital platforms.
4. Public Auction: The auction is conducted publicly by our licensed auctioneer. We manage the entire event, from bidder registration to the final fall of the hammer, ensuring a competitive and transparent environment.
5. Post-Auction Administration: After a successful sale, we handle the collection of funds, remit the proceeds to the MFI (less our agreed-upon fees), and facilitate the transfer of ownership documents to the new buyer.
Fee Structure and Maximizing Value for MFIs (KES)
Our fee structure for MFI asset disposal services is designed to be transparent and aligned with your goal of maximizing recovery. The primary cost is the auctioneer's commission, which is a percentage of the final sale price ('hammer price') achieved at the auction. This ensures we are motivated to secure the highest possible price for your asset. Typically, our commission for vehicle and equipment auctions ranges from 5% to 10% of the sale value.
Other potential costs, known as disbursements, are also involved. These are direct costs associated with the auction process and often include towing fees, secure storage charges (e.g., KES 1,000 - KES 2,000 per day), valuation fees, and advertisement costs in newspapers (e.g., KES 15,000 - KES 50,000 depending on ad size). These costs are itemized and are typically recovered from the sale proceeds before the net amount is remitted to the MFI. We provide a full accounting of all costs and proceeds for complete transparency.
