The document outlines a training course aimed at enhancing debt collection practices within the security sector in Kenya, covering key objectives such as understanding debt collection's importance, improving communication skills, and mastering customer care. Participants will explore various topics including best practices, legal aspects, negotiation techniques, and customer relationship management to increase efficiency in collecting outstanding debts. It emphasizes the balance between effective debt recovery and maintaining positive debtor relationships for future business opportunities.

1. SUPERCHARGE YOUR
COLLECTIONS.
By Joseph Njuguna Maina (CERM, CFCP).

2. WELCOME.
 Your name.
 Your department and role.
 Your expectations.

4. TWO TRUTHS AND A LIE.
 5 participants to share two true statements about
themselves related to debt/ revenue collection, and one
false statement.
 The rest can try to guess which statement is the lie.

5. THE 9 DOT PROBLEM.

6. COURSE OBJECTIVES.
By the end of the course, participants will be able:
1. Understand Debt Collection's Role in Security: Learn why debt collection matters in Kenya's
security sector.
2. Grasp Debt Collection Basics: Get familiar with debt collection rules and challenges in Kenya.
3. Improve Communication Skills: Enhance how you talk to debtors, including understanding cultural
differences.
4. Manage Time Effectively: Learn how to organize your tasks and interactions for better results.
5. Master Customer Care: Discover how to handle difficult situations and keep customers satisfied.
6. Develop Leadership Abilities: Learn to lead your team and motivate them to reach debt collection
goals.
7. Enhance Business Communication: Improve how you write letters, emails, and make phone calls for
debt collection.
6

7. COURSE CONTENT.
 Part 1 : Introduction and definitions.
 Part 2 : Understanding Debt Collection.
 Part 3 : Best Practices in Collections Worldwide & Other Additional Strategies.
 Part 4 : Legal and Regulatory Aspects.
 Part 5 : Negotiation Techniques.
 Part 6 : Open Forum (Share actual case studies and steps taken to mitigate
credit risk) / Concluding Remarks / Action Plan.

9. THE CANDLE PROBLEM SOLUTION.

10. WHY DO WE HAVE TROUBLE THINKING OUTSIDE THE BOX?.
 Functional fixedness is a cognitive bias that negatively affects a person’s ability to problem-solve and innovate.
 The bias causes a person to look at a problem in only one specific way and it can prevent them from developing
effective solutions to their challenge.
 Functional fixedness can impact all areas of one’s life, including their academic life, careers, and personal lives. A
person’s inability to recognize alternative approaches constrains their creativity and limits their potential ideas when
looking to solve a problem.
 Functional fixedness occurs due to strong pre-conceived notions that people develop regarding objects and how they
must solve challenges using those objects.
 Why does it happen?
1) Age.
2) Experience.

11. PART 1
INTRODUCTION & DEFINITIONS.

12. INTRODUCTION & DEFINITIONS.
Effective revenue collection is a linchpin for the sustained financial health of the tourism sector. It ensures
a continuous flow of funds necessary for ongoing operations, investments, and the development of
tourism-related projects and infrastructure.
 Collections - Actions taken within a institution to prevent delinquency and recover past-due debts.
 Debt Collection – Systematic retrieval of outstanding payments from individuals or entities that have
not met their financial obligations.
 Past-due / delinquent - Debt with at least one payment installment not made on or before the agreed
upon payment date.
 Default - Debt where all the agreed terms and conditions have not been adhered to.

13. PART 2
UNDERSTANDING DEBT
COLLECTION.

14. THE TRADITIONAL COLLECTIONS PROCESS.
1. Organizations are just eager to collect payment and end the relationship with the debtor.
2. Detect late payment by defaulters, gather that information into a collection database and
push it to the next collector.
3. If the debt continues to go unpaid, institution will hire a third party which is known as a
collections agency to focus on collecting the debt and report delinquency if the debtors
or customers remain unpaid.

15. REVENUE & DEBT COLLECTION.
 Debt collection is not a difficult process, but it is very tedious.
 Almost none of the people that are in the business claim to be exceedingly
brilliant. Though some of them may claim to have proprietary business
methods, research indicates that none of them are really doing anything that is
not already being done by someone else somewhere else.
 Whether a debt collector is collecting an individual debt or a large portfolio
of debts, the collection process is essentially the same.
 The differences between the successful companies and the unsuccessful
ones usually revolve around being more efficient, which usually comes with
surviving long enough to gain more experience.

16. REVENUE & DEBT COLLECTION (CONT).
Security firms in Kenya often encounter several challenges when it comes to debt collection. Some of
the common challenges include:
 1. Non-payment: Security firms frequently face instances where clients fail to honour their
contractual obligations, leading to unpaid invoices or outstanding debts.
 2. Legal complexities: Navigating the legal framework surrounding debt collection can be intricate,
requiring a deep understanding of Kenyan laws and regulations.
 3. Delays in the legal process: Court proceedings and legal actions to recover debts can be time-
consuming and costly, causing delays in obtaining payment.
 4. Communication barriers: Language barriers or lack of effective communication channels between
debtors and creditors can hinder the debt collection process.
 5. Economic factors: Economic downturns or financial instability can impact the ability of debtors to
repay their debts, posing challenges for security firms in recovering outstanding balances.

17. THE COLLECTIONS PROCESS.
 The collections process is defined as the set of coordinated, appropriate, and timely activities
aimed at full collection of owed monies from clients. The process is intended to convert the Pelt
Security’s receivables into liquid assets as quickly and efficiently as possible, while at the
same time maintaining the goodwill of the debtor in case of future transactions.
 Requires significant interaction with the debtor, beginning with a careful analysis of the debtor’s
situation and continuing through timely and frequent contact over the duration of the debt.
Debtor’s should be offered payment alternatives that are timely and appropriate to each
situation, and all collections activities should be recorded to facilitate continuous monitoring and
follow-up as well as control of debtor compliance with negotiated agreements.

18. THE 10 COLLECTIONS ACTIVITIES.
1) Analysis of the particular case: Who is the debtor? What is his situation? What were the original debt
conditions? Why did the debt fall past-due? Consider internal and external sources of information such as
credit bureaus and bad-debtor lists.
2) Contact with the debtor: What information does the debtor provide? Where is the debtor located? What
actions were taken previously?
3) Assessment: What problem is at the root of the current default? What type of client are we dealing with?
4) Suggesting an alternative: What are the possible solutions? The objective here is to sell the benefits of
paying on time in order to foster a positive payment culture with the client.
5) Securing payment commitments: Are we negotiating effectively? Pelt Security must clearly identify
when, where, how, and how much the debtor will pay and must remember, for example, how a debtor in a
situation of over-indebtedness or decreased income will prioritize the payment of his bills. Are we able to
get the debtor to commit to prioritizing repayment of this debt?

19. COLLECTIONS ACTIVITIES (CONT).
6) Compliance with payment commitments: Did the debtor pay on the agreed-upon date? Does the debtor
demonstrate a desire to repay ? The objective here is to demonstrate consistency throughout the collections process. It
is not enough to reach an agreement and depend on the debtor’s apparent goodwill and positive attitude; collections
staff must follow up on payment commitments.
7) Recording collections activities: Are collections activities carried out in a coordinated manner? Put yourself in the
position of the staff member next in line for collections activities with that debtor.
8) Follow-up on the case: Are we aware of the client’s situation and the collections activities the case has been subject
to?
9) Intensification of collections activities: What is the best action to secure collections of the debt in the most
immediate manner? What assets does the debtor possess? How much can be collected through legal action? The sole
objective when a past-due debt reaches this point is collections, even if it means losing the debtor.
10) Defining a loss: Pelt Security must also clearly define the conditions under which a debt is deemed a loss; that is,
when to cease collections activities. This may be when all possible attempts to recover the funds have proven
unsuccessful and/or when the probability of payment is very low. Pelt Security must measure the cost/benefit of legal
action, reporting past-due client and other actions permitted by law.

20. THE COLLECTIONS PROCESS (CONT).

21. BEST PRACTICES IN COLLECTIONS.
 Best Practice #1 – Adopt Proactive Strategies to Quell Delinquency
Before it Starts.
 Best Practice #2 – Improve Internal Productivity of the Collections area.
 Best Practice #3 – Ensure Quality Information Gathering and
Management.
 Best Practice #4 – Develop Well-Defined Strategies for Collections.

22. BEST PRACTICE #1 – ADOPT PROACTIVE STRATEGIES TO QUELL
DELINQUENCY BEFORE IT STARTS.
Preventive action is less costly, and the best collections activities are
those that manage clients who are not yet past due carefully.
i. Educate Debtors about Pelt Security and why it exists, the cost of collection, Fees and Charges.
ii. Establish Mutually-Agreeable Payment Dates.
iii. Address Customer-Service Complaints Quickly.
iv. Use Positive Reinforcement.

23. BEST PRACTICE #2 – IMPROVE INTERNAL PRODUCTIVITY OF THE
COLLECTIONS AREA.
It could be said that a collections department is only as good as the staff
working in it. A well designed collections strategy weighs the strengths and
weaknesses of the institution, addressing general questions such as
whether collections should be handled internally or externally through a
third party as well as considering what measures should be in place to
ensure staff are properly trained, motivated, and measured.
i. Determine the Appropriate Collections Procedures.
ii. Select and Train Staff Members.
iii. Create Staff Incentives.

24. BEST PRACTICE #3 – ENSURE QUALITY INFORMATION GATHERING
AND MANAGEMENT.
The precise and opportune information about the debtors, their current
situation and important information that bring feedback about the
collection cycle is relevant for the successful on collections.
i. Develop Efficient Information and Support Systems.
ii. Ensure Quality of Debtor Information.
iii. Establish an Internal Past-Due Committee.

25. BEST PRACTICE #4 – DEVELOP WELL-DEFINED STRATEGIES FOR
COLLECTIONS.
Developing a strong collections unit requires clearly defined, documented
and consistent policies and procedures that guide staff through the
collections process and instruct them on how to respond in particular
situations. Such policies and procedures should include a variety of
strategies.
 Establish Debtor-Contact Policies.
 Risk-Based Collections.

26. LEGAL AND REGULATORY ASPECTS.
 Kenya's legal framework, particularly regulations stipulated in acts like the Consumer Protection Act,
governs debt collection. It's imperative to adhere to these regulations to avoid legal consequences.
 Utilizing compliance checklists or protocols ensures that debt collection practices align with legal
requirements, mitigating risks associated with non-compliance.
 Upholding ethical practices, such as refraining from aggressive collection tactics or misleading
communication, upholds the integrity of the Tourism Fund and preserves relationships with debtors.

27. NEGOTIATION TECHNIQUES
 Tailoring credit policies and procedures to fit the unique dynamics of the tourism industry is crucial. For
instance, introducing flexible repayment plans accommodating seasonal income fluctuations can be
highly effective in ensuring consistent payments.
 Leveraging technology, such as robust CRM systems, for efficient debt tracking and automated
reminders helps streamline debt collection processes, ensuring timely follow-ups.
 Emphasis is on the significance of professional yet empathetic communication when interacting with
debtors. Building rapport and understanding while staying firm on payment terms often results in
cooperative debtor responses.

28. NEGOTIATIONS : 10 CARDINAL RULES FOR SUCCESSFUL
COLLECTIONS.
1.Build Rapport: Establishing a good relationship with the debtor can make negotiations smoother. Show empathy, listen attentively, and
try to understand their situation.
2.Focus on Communication: Clearly communicate the debt details, payment terms, and consequences of non-payment. Ensure the debtor
understands the situation and possible solutions.
3.Offer Flexible Payment Plans: Tailor payment options to suit the debtor's financial capabilities. Provide choices in payment schedules or
amounts, making it easier for them to commit to payments.
4.Highlight Benefits of Resolving Debt: Emphasize the advantages of settling the debt, such as improving credit score, avoiding legal
actions, or stopping further collection efforts.
5.Negotiate a Settlement: Offer a discounted amount for a lump sum payment, providing an incentive for the debtor to resolve the debt
faster. Make it clear this offer is time-sensitive.
6.Use Persuasive Language: Frame negotiations positively, emphasizing cooperation rather than confrontation. Phrases like "Let's work
together to find a solution" can be more effective.
7.Stay Patient and Calm: Remain composed and professional, even in challenging situations. Patience can help maintain a cooperative
atmosphere during negotiations.
8.Be Flexible: Be open to exploring alternative solutions or payment arrangements. Flexibility can often lead to finding mutually beneficial
agreements.
9.Document Agreements: Ensure all negotiated terms and agreements are clearly documented in writing, including payment plans,
settlement offers, or any changes made during negotiations.
10.Follow-Up: Maintain regular communication to ensure the agreed-upon payment plan is being adhered to. Prompt follow-up helps in
resolving any issues that may arise and reinforces trust.

29. CUSTOMER CARE TECHNIQUES IN DEBT COLLECTION
Effective debt collection involves more than just demanding payment; it requires a strategic approach that
prioritizes customer care and relationship-building.
Here are some customer care techniques, with a focus on empathy and rapport-building, that we can
employ in debt collection:
1. Empathetic communication: Recognize the debtor's situation and demonstrate empathy towards their
challenges. Listen actively to their concerns and show understanding while still emphasizing the
importance of resolving the debt.
2. Personalized approach: Tailor communication and negotiation strategies based on the debtor's
circumstances. Building a personal connection can foster trust and cooperation, increasing the likelihood
of successful debt recovery.

30. 3. Clear and respectful communication: Maintain professionalism and courtesy in all interactions with
debtors. Clearly communicate payment expectations, deadlines, and consequences of non-payment
without resorting to aggressive or confrontational tactics.
4. Offer payment solutions: Work with debtors to find mutually beneficial solutions for repayment. This
could involve setting up installment plans, renegotiating payment terms, or exploring alternative
arrangements based on the debtor's financial situation.
5. Follow-up and relationship management: Stay engaged with debtors throughout the collection
process, providing updates, reminders, and support as needed. Building a positive relationship, even in the
context of debt collection, can lead to smoother resolutions and future business opportunities.
CUSTOMER CARE TECHNIQUES IN DEBT COLLECTION (CONT).

31. TIME MANAGEMENT PRINCIPLES IN DEBT COLLECTION.
In the fast-paced world of debt collection, time is of the essence. At Pelt Security, where efficiency and productivity are
paramount, mastering time management principles is not just beneficial, but essential for success.
This guide aims to explore the significance of time management in debt collection and provide actionable strategies
tailored to Pelt Security's environment.
 Understanding Time Management Principles in Debt Collection: Imagine a scenario where a debt collector at
Pelt Security spends excessive time chasing low-value debts while neglecting high-priority accounts. Understanding
time management principles can help prioritize efforts, ensuring valuable resources are allocated effectively.
 Prioritizing Tasks for Optimal Results: Using the Eisenhower Matrix, debt collectors can classify tasks into four
categories: urgent and important, important but not urgent, urgent but not important, and neither urgent nor
important. By focusing on tasks in the urgent and important quadrant, such as imminent legal actions or high-value
accounts, Pelt Security can maximize efficiency.

32. TIME MANAGEMENT PRINCIPLES IN DEBT COLLECTION.
 Efficient Client Interactions Management: Establishing standard operating procedures (SOPs) for
client interactions ensures consistency and reduces response time. For instance, having predefined
scripts for common client inquiries or complaints can streamline communication, enhancing client
satisfaction.
 Workflow Optimization Techniques: Implementing automation tools like email templates or
automated reminders for follow-ups can reduce manual effort and minimize the risk of overlooking
critical tasks. By incorporating workflow optimization techniques, debt collectors at Pelt Security can
handle a higher volume of accounts without sacrificing quality.
 Leveraging Productivity Tools and Resources: Introducing time-tracking apps like Toggl or
project management tools like Asana allows debt collectors to monitor their productivity and allocate
time more efficiently. For instance, tracking the time spent on each debt collection task can highlight
areas for improvement and facilitate better resource allocation.

33. CUSTOMER SATISFACTION AND RETENTION IN DEBT COLLECTION.
 Building Trust and Rapport: Trust is the cornerstone of any successful debt collection process.
Establishing a relationship built on trust can encourage debtors to engage positively, leading to
higher chances of repayment.
 Long-Term Financial Health: Satisfied customers are more likely to fulfill their obligations promptly,
leading to improved cash flow for the creditor. Additionally, maintaining positive relationships with
customers can result in future business opportunities beyond debt resolution.
 Reducing Costs and Legal Risks: Dissatisfied customers may resort to legal action, which can
escalate costs and damage the reputation of the creditor. By prioritizing customer satisfaction,
creditors can mitigate legal risks and associated expenses.
 Enhancing Brand Reputation: A customer-centric approach in debt collection demonstrates the
creditor's commitment to ethical practices and customer well-being. Positive experiences can bolster
the creditor's reputation, attracting more clients and investors in the long run.

34. MANAGING DIFFICULT CUSTOMERS AND RESOLVING COMPLAINTS EFFECTIVELY.
 Active Listening and Empathy: Actively listen to the concerns of debtors and demonstrate empathy towards their
circumstances. Acknowledge their feelings and validate their experiences, fostering a sense of understanding and rapport.
 Remaining Calm and Professional: Maintain composure, even in challenging situations, to de-escalate conflicts and ensure
productive communication. Responding with professionalism and respect can help build trust and cooperation.
 Clear and Transparent Communication: Use simple and transparent language to explain the debt situation, repayment
options, and consequences. Avoiding jargon or ambiguity ensures that debtors understand their obligations and available
alternatives.
 Offering Flexible Solutions: Collaborate with debtors to find practical and mutually acceptable solutions to resolve
outstanding debts. This may involve negotiating flexible repayment plans, settlements, or hardship arrangements tailored to the
debtor's circumstances.
 Follow-Up and Support: After resolving a complaint or reaching an agreement, follow up with debtors to ensure their
satisfaction and address any remaining concerns. Providing ongoing support demonstrates a commitment to customer care
and fosters trust.
 Continuous Staff Training: Equip employees with comprehensive training in customer service, conflict resolution, and
negotiation techniques. Regular training sessions can enhance staff competencies and empower them to handle difficult
situations effectively.

35. LEADERSHIP WITHIN THE REALM OF DEBT COLLECTION.
1. Embarking on the Leadership Journey in Debt Collection:
 Purposeful Leadership: At the core of effective debt collection leadership lies a sense of purpose
beyond mere financial targets. Leaders in this domain understand that their role extends beyond
numbers; it encompasses helping individuals navigate through financial challenges with dignity and
respect.
 Empathy in Action: Leaders who excel in debt collection recognize the human aspect of the
process. They cultivate empathy not only for debtors but also for their team members. This empathy
fuels their ability to communicate with clarity, understanding, and patience, fostering trust and
cooperation within the team.
 Ethical Compass: In an industry often scrutinized for its practices, leaders serve as ethical
compasses, guiding their teams to navigate complex regulatory landscapes with integrity. They
uphold the highest standards of compliance and fairness, ensuring that every interaction,
negotiation, and resolution aligns with ethical principles.

36. LEADERSHIP WITHIN THE REALM OF DEBT COLLECTION.
2. Igniting Motivation and Inspiration:
 Visionary Leadership: Leaders ignite motivation by painting a compelling vision of success. They
instill in their team members a shared sense of purpose, illustrating how their efforts contribute to
broader organizational goals and, ultimately, to making a positive impact on people's lives.
 Cultivating a Culture of Recognition: In the fast-paced world of debt collection, acknowledgment
is fuel for motivation. Leaders celebrate not just the big wins but also the small victories, recognizing
the resilience, creativity, and dedication exhibited by team members in overcoming challenges.
 Investing in Growth: True leaders understand that investing in their team's growth is an investment
in the organization's future success. They provide continuous learning opportunities, mentorship,
and coaching, empowering individuals to unlock their full potential and take on new challenges with
confidence.

37. LEADERSHIP WITHIN THE REALM OF DEBT COLLECTION.
 Fostering Collaboration and Camaraderie: Debt collection can be a demanding and emotionally
taxing field. Leaders foster an environment where team members support and uplift each other,
fostering a sense of camaraderie that transcends professional boundaries and strengthens the
team's collective resolve.
 Leading with Passion: Above all, leaders inspire by leading with unwavering passion and
conviction. They embody the relentless pursuit of excellence, demonstrating through their actions
and words that they wholeheartedly believe in the mission they're undertaking and are committed to
seeing it through.

38. QUESTIONS/ COMMENTS.

39. CONCLUSION.

40. ADDITIONAL COLLECTIONS CONCERNS.
i. Monitoring collections activities: Through internal audit and control units, Pelt Security may conduct
random visits to a representative sample of defaulters from each portfolio in order to supervise the
application of appropriate collections policies and procedures in the field and to obtain client feedback
regarding service quality.
ii. Forming “focus groups”: Focus groups comprised of not only defaulters allow Pelt Security to obtain
feedback on collections service quality, but also allow institutions to understand client’s payment
priorities, which can be influenced by the quality of service provided by the institution.
iii. Requiring frequent and detailed reporting: Collections staff should report regularly on their
interactions with clients and present reports to managers and other relevant parties as a part of the
overall analysis and evaluation of collections activities.
iv. Setting a time limit for interaction: Pelt Security should impose time limits for officer interaction with
a defaulter, after which the case should be transferred to a different officer. The involvement of
different actors (resolution officers, collections agents, general managers) in the collections process
may help to reduce the possibility of fraud and/or mistreatment of the client.

41. KEY HIGHLIGHTS.
 The debtor should see collections as an ongoing rather than sporadic activity, which means that it is very
important that the various actors in the process—such as resolution, and legal —act in a coordinated and
timely manner.
 The debtor must feel that the Pelt Security has its finger on the pulse of the situation at all times, acting
quickly, flexibly, and definitively to control the situation.