Unlocking Value in MFI Repossessions
Searching for quality mfi repossessed items is a savvy way to acquire assets like vehicles, machinery, and electronics at significantly below-market prices. Microfinance Institutions (MFIs) in Kenya, which are regulated by the Central Bank of Kenya (CBK) under the Microfinance Act, 2006, often repossess assets when borrowers default on secured loans. To recover the outstanding debt, these items are sold to the public through auctions. As professional auctioneers for numerous leading MFIs, Swipe Recoveries Experts Ltd facilitates these sales, ensuring a transparent, legal, and accessible process for buyers looking for exceptional value. Our auctions provide a direct channel to purchase a wide variety of well-maintained assets.
The Legal Basis for Repossession and Sale by MFIs in Kenya
The repossession and subsequent sale of items by Microfinance Institutions are strictly governed by Kenyan law to protect both the creditor and the debtor. The primary legal instrument is the loan agreement itself, which outlines the terms of the security. For movable assets (chattels) like vehicles, electronics, or business equipment, the Chattels Transfer Act is a key piece of legislation. It allows a lender to take possession of the asset used as security in the event of a loan default.
Once an MFI exercises its right to repossess an item, it cannot simply sell it privately. The law mandates a public and transparent process to realize the security. This is where a licensed auctioneer is required. The auctioneer must follow a defined procedure, which includes giving the debtor adequate notice of the intended sale to provide a final opportunity to settle the debt. If the debt remains unpaid, the auctioneer will then proceed with a public auction. Swipe Recoveries Experts Ltd ensures that every step, from repossession instruction to the final sale, is conducted in full compliance with these legal requirements, safeguarding the integrity of the transaction.
How to Find and Purchase Repossessed Items: A Step-by-Step Guide
Acquiring MFI repossessed items through our auctions is a straightforward process. First, you need to find the listings. Swipe Recoveries advertises all upcoming auctions in major daily newspapers, on our official website, and across our social media platforms. These advertisements detail the items for sale, which commonly include motor vehicles (cars, motorcycles, boda-bodas), electronics (laptops, televisions), business equipment (generators, sewing machines), and household furniture.
The next critical step is inspection. We hold designated viewing days before every auction, allowing potential buyers to physically inspect the items at our secure yards in Nairobi. We strongly encourage attendance, as all mfi repossessed items are sold on an "as-is, where-is" basis, meaning exactly as they appear, with no warranties.
On auction day, interested parties must register to bid. This involves providing identification and paying a refundable bidding deposit. The deposit amount varies depending on the item's value, for example, KES 10,000 for electronics or KES 50,000 for a motor vehicle. Once the auction begins, you can place your bids. If you are the highest bidder, you must complete the payment and collection process, typically by paying the balance of the bid price within 24 to 48 hours. After full payment, you can collect your item along with all necessary ownership documents.
Auction Costs and Pricing Expectations for MFI Assets
The final price of MFI repossessed items is determined by competitive bidding at the auction. While this means you can secure a great deal, it's important to understand the full cost. Each auction has a 'reserve price' for items, which is the minimum the MFI will accept, usually tied to the outstanding loan amount. The price you bid is known as the "hammer price."
In addition to the hammer price, you will be required to pay the auctioneer's commission. This fee is a percentage of the sale price, as legally stipulated by the Auctioneers (Practice) Rules. For movable property, this is typically 10% on the first KES 100,000, 7% on the next KES 900,000, and so on. For instance, if you purchase a repossessed car for a hammer price of KES 600,000, the commission would be approximately KES 45,000 (10% of the first 100k + 7% of the next 500k). It is also wise to factor in potential Value Added Tax (VAT) if applicable. Always confirm the full cost structure with the auction clerk before placing your bids.
