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3. Chose the best
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Our local partners

Tsegamlak Solomon & Associates Law Office
Tsegamlak Solomon & Associates Law Office: Your reliable Law firm in Addis Ababa. Providing top-tier legal services across corporate advisory, debt recovery, mergers and acquisitions with a proven success track-record. Tailoring unprecedented solutions for private investors to start-ups and SMEs with Ethiopian legal expertise.
Mesfin Getachew and Associates Law Office
Experience Mesfin Getachew and Associates Law Office, a leading Law firm in Addis Ababa, Ethiopia, renowned for effective debt collection and negotiation prowess. Choose us for assured resolution and diligent legal services.
Endris Amino Law Office
Liberia Street, Electric World Building 5th Floor, Addis Ababa, Ethiopia
Endris Amino Law Office – ELO is a leading full-service law office in Ethiopia. Since its foundation in 2013, ELO is providing effective, efficient, and creative legal services to meet the distinctive needs of private and corporate clients.
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Debitura was instrumental in helping us locate an excellent debt collection lawyer in Addis Ababa while keeping our costs low. Their business model works like a charm and adds a great deal of transparency to the market.
Gemeda Zemedkun - business owner in Addis Ababa
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Using Debitura has been a huge advantage for us, as it has connected us with a collection partner that has a deep understanding of the market in Ethiopia.
Mengistu Hailemariam. - business owner in Addis Ababa
4,85/5
Average rating of our services in Addis Ababa
84%
Average debt recovery rate in Addis Ababa
45%
Average cost saved when using our collection service in Addis Ababa
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Guide

How to collect an unpaid invoice from a debtor in Addis Ababa?

If you are seeking to reclaim a debt in Addis Ababa, Ethiopia, then this guide was created for you! In here you will find all you need to know about recovering outstanding amounts. If you're searching for help from a debt collection firm or attorney in the area, feel free to fill out our form and you will receive 3 free quotes within two days.

Overview of the debt collection process in Addis Ababa

In Addis Ababa, the debt collection process typically involves multiple steps. Prior to instituting a collection case, we conduct an extensive analysis of the situation to customize our approach based on the amount of the claim, type of debtor, and any other pertinent information. This detailed and personalized methodology results in the most successful debt recovery rates.

The image below explains our standard framework for collecting debt in Addis Ababa:

Step 1: Find a local collection agency or attorney

You can send over your matter to Debitura, and you'll then be able to spot 3 different offers from Addis Ababa debt collecting companies willing to help out.

Step 2: Pre-legal collections

We will commence our strategy with an outreach to your debtor through all contact methods in Addis Ababa. Our intent is to prompt the debtor to accept their debt and develop a payment plan. Our amicable collection process is backed by a no-cost, no-payment warranty should your debt not be recovered. When you work with Debitura, you have nothing to lose when it comes to collection of your debt!

Step 3: Evaluation:

If you have exhausted all pre-legal means of collecting payment from the debtor, it is time to consider your options for proceeding. We will review the amount of your claim, the likelihood of repayment, and the legal system in Addis Ababa to assist you in opting for the most suitable action. There are generally three ways to approach the situation in Ethiopia:

Step A: Surveillance:

If the amount you are claiming is less than 5000$, it may not be worth pursuing legal action. Therefore, we suggest debt surveillance; this acts as an ongoing pre-litigation measure. We will attempt to contact the debtor and reach a mutually accepted arrangement. If anything changes, we will inform you on the best course of action.

Step B: Legal collections:

If your claim is more significant, we suggest initiating a legal process following the pre-legal phase. Generally, this is usually when the amount is over $5,000, depending on your creditor’s financial capacity and any other contributing elements. The exact procedure in such situations depends on your particular circumstance, in addition to whether the debtor has made any objections or neglected to respond to the pre-legal correspondence. Usually, minor claims can be handled through a more basic legal process. The usual duration of the legal collection is from 12 to 18 months, and in some cases, you might need to pay a set fee to cover legal fees. Quality and fees for legal services in Addis Ababa significantly differ, and so we always suggest obtaining multiple quotes from various debt collection attorneys prior to making your decision.

Step C: Debt enforcement:

If you have either the debtor's acknowledgement of your claim or a court order, you may use a bailiff's court to enforce it. This usually requires 12-18 months in Addis Ababa, and typically involves payment of a court fee and legal fees for your debt collection lawyer. The fees are based on the amount of your claim; obtain an accurate quote by uploading your claim to Debitura.

Cost of debt collection in Addis Ababa

Average success fee for pre-legal debt collection in Addis Ababa

The cost of debt collection in Addis Ababa may vary based on the size of your claim, and the collection stage. For pre-legal collection, it is usual to pay a success fee if the debt is reclaimed fully. The success fee is tailored to your claim's size and is typically included in the collection cost.

Size of your claimSuccess fee
< 1000$32,5%
1000-5000$19,5%
5.000-10.000$15,6%
>10.000$12,35%

Hourly rate for legal-debt collection services in Addis Ababa

The courts in Addis Ababa require a payment for any legal debt collection. The amount of this payment can vary based on how much you are hoping to recover. Additionally, debt collection processes can require assistance from a lawyer or agency. The price of their services depends on their hourly rate and the amount of time needed to respond to the issue. The more details regarding the debt collection, the more hours required. See below for the estimated average hourly rate for legal assistance in Addis Ababa.

hourly rateCategory
< 75$Very low cost
100$Low cost
150$Medium high cost
> 200$High cost

Addis Ababa city risk profile

We have examined Addis Ababa's critical financial data and extrapolated a risk assessment. You can use this analysis to evaluate your payment terms and manage your risk when trading with customers in Addis Ababa.

Low risk
5-10
Medium-low risk
11-15
Medium risk
16-20
Medium-high risk
21-23
High risk
24-26

Our analysis concludes that the risk of running a business in Addis Ababa is medium-high.
Based on this medium-high score, we recommend always charging upfront payment or using credit insurance when trading with customers in Addis Ababa, as it may be very difficult to get paid.

The medium-high risk score is based on the following factors:

Economic Risk:
6
Business Risk:
5
Political Risk:
5
Commercial Risk:
1
Financing Risk:
4
Economic risk in Addis Ababa

Ethiopia has a high economic risk, ranking 6 out of 6 on the global scale. Despite its medium-size economy, Ethiopia's GDP is growing by 5.64% per year with a GDP of 111.27 bn. USD in 2021. The purchasing power of citizens in Ethiopia is low, with GDP per capita of 944 USD, ranking 155 out of 183 countries. Inflation is another factor in Ethiopia's economic health, currently standing at 26.8%, which is considered a very high rate. As economic development continues, Ethiopia's economic risk may decrease and improve the quality of life for its citizens.


Business risk in Addis Ababa

Addis Ababa, Ethiopia's capital city, faces significant business risk due to its low economic freedom score. Property rights have an index of 23, and business freedom index is 48 out of 100. The overall economic freedom index of 52 out of 100 is further indication of the city's poor business environment. Evaluating ten indicators from the World Bank’s Doing Business study, Ethiopia's performance is considered below average in comparison to other African countries. Each of these three indicators is a major factor in determining business risk, presenting a difficult atmosphere for entrepreneurs operating in the city.


Political risk in Addis Ababa

Political instability and weak governance are major issues in Ethiopia, and is seen in the very low score of -0.61 on the rule of law index. The corruption index is also very weak, coming in at -0.4, which enforces the feeling that contracts are unlikely to be enforced in Ethiopia. The political stability index is equally weak, at -2.07, and the shadow economy is a high 25.1% of Ethiopia's GDP. Addis Ababa, the capital, has been rocked with political upheaval for a long time and companies trying to trade there should be aware of the increased risk of political instability. Companies should be cautious in their business dealings in the city and the country, and it may be advisable to deny credit and insist on upfront payment.


Commercial risk in Addis Ababa

Addis Ababa, the capital of Ethiopia, is an investor-friendly city with a low commercial risk score of 1 out of 4. With a negative trade balance of -9.07% of GDP, the amount of services and goods imported is higher than what is exported. Despite this, the growth in exports of goods and services is increasing by 35.43% annually and now accounts for 7.59% of the GDP. Additionally, imports of goods and services make up 16.66% of the GDP. To further aid investment, Ethiopia has a foreign exchange reserve of bn. USD.


Financial risk in Addis Ababa

The Ethiopian economy faces a high financial risk, according to recent ratings. Banks in the country suffer from a lack of efficiency and stability, with a credit information sharing index of only 0 on a scale of 0 to 8. Furthermore, creditors have few legal rights in Addis Ababa, facing a score of 3 out of 12.

Because of this, accessing and understanding the credit risk of an Ethiopian customer is near impossible. Businesses wanting to do business in the city are advised to demand payment upfront or utilize credit insurance, to ensure they receive payment. Grim economic conditions mean companies must be extra cautious when doing business in Addis Ababa.

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