Creditors are reportedly seizing assets not in credit agreements.
Microfinanciers have been accused of contributing to grassroots poverty by irregularly auctioning credit defaulters, taking advantage of limited understanding of the law.
A workshop for small scale group entrepreneurs held in Murang’a heard the creditors were seizing assets not in credit agreements.
Women groups are said to be the worst affected since they borrow through chamas without their husbands’ knowledge.
The workshop dubbed “Understanding the auctioneer-do’s and don’ts” was organised by the Kenya National Society of Professional Auctioneers.
Mr Steve Juma representing the Society’s technical committee said there is no excuse for “rogue auctioneers to raid debtors without adhering to the rule of law”.
He explained that there are four forms of auction execution — court decrees (where there is a court order), rent, repossession, and recovery of charged properties (collateral).
“The law requires that a debtor be treated decently since falling into debt is not criminal. As is common with rogue practitioners, no creditor is supposed to be served through electronic media or a mobile phone," he said.
In event where the auctioneer is effecting a court order, he is supposed to visit and take stock of the goods to be attached, ascertain their status and quantify them.
It is then that he will prepare a proclamation and leave you with a copy, which is a notice of intent to repossess within seven days.
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