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Why we are entering the debt collection business in Kenya and EAC from UAE
Boniface Ndagwa is the Executive Director at Kalita system – Debt Holding Africa, a debt collection business headquartered in the UAE. Debt Holding Africa recently entered the Kenyan market as a springboard to East Africa. Photo | Pool
What you need to know:
Boniface Ndagwa is the Executive Director at Kalita system – Debt Holding Africa, a debt collection business headquartered in the United Arab Emirates. Debt Holding Africa recently entered the Kenyan market as a springboard to East Africa
We primarily offer two products: debt collection under the agency scheme and debt assignment under the contract of sale. Agent scheme is a standard model of work in which the client pays a commission only on the recovered funds. Debt assignment is the acquisition of rights to the obligations of debtors to creditors. Those in this space will tell you that buying and selling overdue debts in Kenya is almost undeveloped. In my meetings with banks, managers have wondered if it happens at all. I think this could be due to Kenya's non-adherence to the Basel standards, which does not oblige banks to treat toxic assets on their own balance sheets “differently.
There’s also a not-so-good reputation among collection companies working Kenya. A few prominent players are trustworthy. Financial companies are insured and do not take the risks associated with the active transfer to the collection and much less the sale of assets. In addition, there is a lack of elementary practice and experience in assignment transactions. We expect to correct at least the last two points.
I have previously over-invested in one portfolio. I also invested on assets that I could not easily offload and this cost me both financial and investment opportunities. Being in the debt market, though, I have come to learn the importance of seeing money mistakes as opportunities. We all do make money mistakes; the difference is those who fall forward become better at it.
I always pay myself first. This way, I am better positioned in saving and investing so that my money is always working for me. I have also learned that reducing overhead where possible and avoiding unnecessary capex are efficient methods of saving and increasing personal allocation for investment.
If you do what you love, money will always follow. At a personal level, I have found uplifting those within your community to be profoundly satisfying. This doesn’t always mean spending your money, but could be as simple as offering your valuable time, expertise, and supporting local initiatives. Where you have to spend money, it is important that you do so within your budget. Don’t break the bank or go into debts to impress.
Launching the regional operation with a team that has been in collections for over 13 years has been the highlight of my career. We have been able to set up automated processes that have enabled our customers to access more than 30 collection technologies. All of them are customised for specific target groups, be it banks, micro finance, utility companies, fintech, private business. I have experienced both entrepreneurship and employment. There are those who make great employees and others entrepreneurs. Go for what you are good at but don’t be afraid to venture. Currently, I consider myself a hybrid of both.