This study delves into examining the financial performance of Deposit-Taking SACCOs (DTSs) in Meru County, Kenya. It places particular emphasis on the impact of different debt collection strategies on their overall prosperity, while also shedding light on the essential role played by efficient credit management practices. The financial performance of Deposit-Taking SACCOs (DTSs) in Meru County, Kenya, is examined in this study in relation to debt collection policies. The goals of the study are to comprehend the ways in which various debt collecting tactics affect financial results and evaluate the wider ramifications of these practices in relation to credit management procedures. The study also examines how credit term constraints affect financial performance and the advantages of capital adequacy. Three theoretical stances transactional cost, portfolio, and agency theories form the foundation of the study. To guarantee a balanced representation of respondents from different departments within DTSs, a stratified random sample technique was used. Participants were given self-administered questionnaires to complete as part of the study's correlation survey design, which collected primary data. Out of the 16 DTSs in Meru County, a sample of 120 responders was selected. In order to assess the associations between variables and test hypotheses, the data analysis process involved the use of inferential statistics, including regression analysis and correlation. The results show that while stringent lending term limits can reduce profitability, efficient debt collection practices greatly improve SACCOs' financial success. This study emphasizes how important well-designed debt collection procedures are in assessing DTSs' financial stability.