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Sample of Debt collecting agency agreement [2024]

The following is a sample of Debt collecting agency agreement


THIS AGREEMENT dated the … … … day of … … … … … … Two Thousand and…….. is made


ABC,  a national banking association organized and existing under the laws of the State of Delaware in the United States of America and registered as a bank pursuant to the provisions of the Banking Act (Chapter 488 of the Laws of Kenya) in the Republic of Kenya and having its registered office in Nairobi in the said Republic and of Post Office Box Number 0000, Nairobi aforesaid (hereinafter referred to as “the Principal” which expression shall where the context so admits include its successors and assigns) of the one part

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AAA KENYA LIMITED a Limited Liability Company incorporated in the Republic of Kenya and of Post Office Box Number 000 Nairobi in the said Republic (hereinafter referred to as “the Agent” which expression shall where the context so admits include its successors and assigns) of the other part:


(A)  The Principal has, at the request of the Agent agreed to provide loans (hereinafter called the “Loan Facilities”) to the Agent’s employees.

(B) The Agent has, at the request of the Principal, agreed to be appointed as the Principal’s agent for the collection of all repayment sums due in respect of the Loan Facilities.

(C) The Agent has further agreed that the Principal shall debit the Agent’s Account with the total loan repayment sums due to the Principal, whether collected by the Agent or not.



In this agreement, unless the context otherwise requires:

1.1 “Facility Application” means the prescribed Loan Application forms submitted by the Agent’s employees under the staff loan scheme arranged by the Agent and accepted by the Principal.

1.2 “Agent’s Account” means the bank account maintained by the Agent with the Principal.

1.3 “Debtor” means each of the Agent’s employees who have been granted Loan Facilities by the Principal.

1.4 “Loan Facilities” means the total amount of the loans granted to the Agent’s employees pursuant to the Facility Application.

1.5  “Repayment Sums” means the total monthly installments payable by the Agent’s employees in respect of the Loan Facilities granted to them pursuant to the Facility Application.

1.6  The singular includes the plural and vice versa.

1.7  Any reference in this agreement to any provision of a statute shall be construed as a reference to that provision as amended, re-enacted or extended at the relevant time.

1.8 The headings in this agreement are for convenience only and shall not affect its interpretation.


2.1  Subject to the terms and conditions of this agreement, the Principal appoints the Agent as its agent to collect all Repayment Sums due under the Facility Application in accordance with clause 3.3.

2.2  The Agent shall be the agent of the Principal and, accordingly, the Agent shall be liable to the Principal for the collection of all Repayment Sums, and shall account to the Principal therefor in accordance with clause 3.4.


The Agent agrees with the Principal:

3.1 Entry into Facility Application

Before signing any Loan Application:

3.1.1 To take such steps as may be necessary to ensure to the reasonable satisfaction of the Agent that the Debtor is a fit and proper person to enter into the Agreement.

3.1.2 To procure the Debtor’s signature to the Agreement having ensured that before such signature all parts of the Agreement have been fully and correctly completed.

3.1.3 To ensure that the Debtor’s signature is verified and confirmed by the duly authorized signatories of the Agent.

3.1.4 To comply with all other requirements of the contracts between the Principal and the Agent.

3.2 Terms of the Facility Application

3.2.1 To ensure that each Facility Application signed pursuant to clause 3.1 is in the appropriate standard form supplied to the Agent by the Principal and not to vary or add to the terms or the layout of any such Facility Application without the prior consent in writing of the Principal.

3.3 Collection

3.3.1Without charge to the Principal, to collect punctually as agent of the Principal all repayment sums due under each Facility Application and to ensure that the Agent’s Account shall always have sufficient or adequate funds or facilities in respect of all Repayment Sums due under each Facility Application in order to enable the Principal to debit the Agent’s Account with the total loan Repayment Sums due under the Facility Application.

3.3.2 In the event that the Agent’s Account does not have adequate or sufficient funds or facilities to meet the Repayment Sums due under the Facility Application, the Agent shall, within three (3) business days immediately following the last date of each calendar month, transfer into the Agent’s Account such funds or facilities as shall be adequate to meet the said Repayment Sums.

3.3.3 In the event that the Agent fails to comply with the provisions of clause 3.3.2 or defaults in the payment of any indebtedness of the Debtor when due, the Principal shall be entitled to make a demand for such payment from the Agent pursuant to the Guarantee and Indemnity provided by the Agent.

3.4 Accounts

The Agent shall at its own cost and expense:

3.4.1 Maintain proper accounts on behalf of the Principal in the names of the Debtors showing the amounts paid by and due from the Debtors and, on request, to permit the Principal and any person authorized by the Principal to inspect and audit such accounts and to take extracts and copies.

3.4.2 Provide the Principal on request with copies of any accounts maintained pursuant to clause 3.4.1

3.5  Guarantee and Indemnity

If the Loan Facilities are determined by reason of any default on the part of the Debtor or by reason of the Agent exercising any power of termination vested in him by any contract between the Debtor and the Agent, the Agent hereby:

3.5. Irrevocably and unconditionally guarantees, as principal obligor, to pay to the Principal on demand all monies and liabilities which shall have been advanced to such Debtor and which shall then be outstanding under the Facility Application.

3.5.2 Undertakes to indemnify and keep indemnified the Principal on demand against all losses, costs and expenses suffered or incurred by the Principal in relation to this agreement or which it may sustain in consequence of any default in payment by the Debtor.

3.6 Interest on Overdue Payments

3.6.1 If the Agent fails to pay the sums due under clauses 3.3.2 and 3.6, such sum shall bear interest from the due date until payment is made (irrespective of whether the date of payment is before or after any judgement or award in respect of the same) at the rate of …… percent above the Principal’s base rate from time to time subject to a minimum rate of …… per cent per annum.

3.6.2 The Agent shall make all payments of the sums payable under clauses 3.3.2, 3.6 and 3.7.1 to the Principal without any deduction or net of such deductions (if any).


4.1 The Principal agrees with The agent that upon receipt of the Facility Application the Principal shall pay the proceeds of the Loan Facilities to the nominated person in accordance with the Facility Application.

4.2 The Principal reserves the right to refuse to disburse the proceeds of the Loan Facilities in accordance with clause 4.1 provided that this right shall only be exercised on reasonable grounds.


5.1 This agreement shall come into force on the date of this agreement and, subject as provided in clause 5.2 shall continue in force for a period of 5 years and thereafter unless or until terminated by either party giving to the other written notice expiring at or at any time after the end of that period.

5.2 The Principal shall be entitled to terminate this agreement by written notice to the Agent if:

5.2.1 the Agent fails to pay within seven (7) days after the due date any sum payable by it under this agreement or any Related Document when due. Provided that the Principal shall not be entitled to terminate this agreement if the failure to pay occurs solely for administrative or technical reasons affecting the transfer of funds despite timely payment instructions by the Agent and that payment is received by the Bank within 2 Business Days after the due date, or;

5.2.2 any other event or series of events or any circumstances whether related or not occur(s) or arise(s) which, in the opinion of the Principal; may be likely to have a material adverse effect on the Agent or its ability or willingness to perform or comply with any of its obligations under this agreement and/or any Related Document.

5.3 Either party shall be entitled to terminate this agreement by written notice to the other if:

5.3.1 this agreement or any Related Document is or becomes (or is alleged to be) unlawful or unenforceable in any respect; or

5.3.2 that other party commits a breach of this agreement (not being a repudiatory breach of this agreement);

5.3.3 an encumbrancer takes possession or a receiver is appointed over any of the property or assets of that other party;

5.3.4 that other party makes any voluntary arrangement with its creditors or becomes subject to an administration order;

5.3.5 that other party goes into liquidation (except for the purposes of amalgamation or reconstruction and in such manner that the company resulting therefrom effectively agrees to be bound by or assume the obligations imposed on that other party under this agreement);

5.3.6  anything which, under the law of any jurisdiction is analogous to any of the acts or events specified in clauses 5.3.3, 5.3.4 and 5.3.5;

5.3.7 that other party ceases, or threatens to cease, to carry on business.

5.4 The rights to terminate this agreement given by this clause shall be without prejudice to any other right or remedy of either party in respect of the breach concerned (if any) or any other breach.


Upon the termination of this agreement for any reason:

6.1  Any obligation of the Principal to grant the Loan Facilities shall be terminated;

6.2 The Loan Facilities shall become immediately due and payable, whereupon the Agent shall forthwith repay the same together with all interest accrued and all other sums payable under this agreement.

6.3 If the Agent fails to ensure that the Agent’s Account has sufficient funds or facilities to meet the Repayment Sums due at the date of termination of this agreement, the Principal shall be entitled to enforce its rights under the Guarantee and Indemnity provided by the Agent.


7.1 The Principal shall be entitled to perform any of the obligations undertaken by it and to exercise any of the rights granted to it under this agreement through any other company which at the relevant time is its holding company or subsidiary and any act or omission of any such company shall for the purposes of this agreement be deemed to be the act or omission of the Principal.

7.2  The Principal may assign this agreement and rights and obligations under it.

7.3  If any provision of this agreement is held by any court or other competent authority to be void or unenforceable in whole or part, this agreement shall continue to be valid as to the other provisions and the remainder of the affected provision.


8.1 This agreement shall be governed by and construed in all respects in accordance with the Laws of Kenya, and each party agrees that the courts of the Republic of Kenya shall have jurisdiction to hear and determine any suit action or proceeding and to settle any disputes, which may arise out of or in connection with this agreement and for such purposes hereby irrevocably submit to the jurisdiction of such courts.


9.1 Any notice or other information required or authorized by this agreement to be given by either party to the other may be given by hand or sent (by registered post) to the other party at the address referred to on page 1 of this agreement.

9.2 Any notice or other information sent by cable, facsimile transmission, e-mail or comparable means of communication shall be deemed to have been duly sent on the date of transmission, provided that a confirming copy is sent by registered post to the other party at the address referred to in clause 8.1 within 24 hours after transmission.

IN WITNESS whereof this Agreement has been duly executed by the parties the day and year first hereinbefore written.

SEALED with the Common Seal of            ]

AAA KENYA LIMITED in the presence of]

Director/Secretary                                       ]

SIGNED by … … … … … … … … )

the duly Authorized Attorney of       )

ABX N. A. in the presence of:    )




Advocate                                         )


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Isack Kimaro
Isack Kimaro

Isack Kimaro, a lawyer, Creative Writer and self-taught SEO expert has been a prominent author of law-related topics since 2017. Through hard work, dedication, and a relentless pursuit of knowledge, Isack has successfully navigated the legal industry by providing valuable and easy-to-understand legal information to 500,000+ individuals of all levels of understanding.