Updated 26 Sept 2026 5 min read
The most effective debt recovery is the recovery that is never needed. Suppliers extending credit to Kenyan distributors can reduce their exposure considerably with a few disciplined practices at the start of the relationship and throughout it.
Due diligence
Before extending credit, confirm the distributor's legal identity through an official search, obtain trade references and review available financial information. Contract with the registered company, not a trading name.
Contract terms that protect the supplier
A well-drafted distribution agreement should address:
- Payment terms, credit limits and the right to suspend supplies on late payment.
- Retention of title to goods until payment is received in full.
- Contractual interest on overdue sums.
- Governing law, jurisdiction or arbitration.
- Periodic confirmation of the account balance by the distributor.
Security
For larger exposures, consider bank guarantees, standby letters of credit, personal or parent-company guarantees and trade credit insurance. Each shifts part of the risk away from the supplier.
Early warning signs
Lengthening payment times, requests for extended terms, partial payments without explanation and changes in key personnel are all signals to review the account. Acting at the first sign of difficulty preserves more options than waiting until the relationship has broken down.
Frequently asked questions
This article is general information for commercial creditors and is not legal advice on any particular matter. Submitting a claim does not create an advocate-client relationship.