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Obi 1 Kanobi		#301 Posted : Saturday, August 13, 2016 9:52:43 AM
Rank: Elder Joined: 7/23/2008 Posts: 3,017		MaichBlack wrote: And I can see most Wazuans have the villager mentality of "Banks are making billions" at the expense of mwananchi. When a bank with assets of 566 Billion makes a profit of 16 Billion, what is grand about that??? That is a MERE 2.83% ROA!!! But you can bet your average Kenyan will just see the 16 Billion! Financial literacy should be made compulsory in Primary and High School. It would serve people better than "If a train leaves mombasa at 9:00am and another one leaves Nairobi at 9:30am bla bla bla..." kind of questions. Don't be arrogant, stop prescribing for kenyans what you think they need. We are looking for solutions to real life problems and not lectures on the supply and demand curves. Most of the money banks lend belong to people and not bank owners as you are trying to tell us here. "The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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sparkly		#302 Posted : Saturday, August 13, 2016 10:25:31 AM
Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi		MaichBlack wrote: githundi wrote: Liv wrote: githundi wrote: mlennyma wrote: githundi wrote: mlennyma wrote: githundi wrote: 3.These wanjikus who think they will benefit from low rates will be shocked to find out they will in first instance not qualify for a loan i can see how bitter you feel breaking your points a post after the other instead of a single script,how about earning more interest on deposits? Simple banks reaçtion; preference for huge fixed deposits from corporate and raise operating costs for Wanjikus accounts to cover for the lost revenue... Safaricom is an option for wanjikus small savings if banks raise operating expenses Yes,an option at zero interest rate. Not the 7 %..you are talking about.. I hear that some banks are likely to reduce deposits from Wanjiku, as there will be no need to receive expensive funds and lend them out in a high risk low return environment. So Wanjiku will not win with high returns on her deposits. Yes @ Liv. .that is what may happen Very true!!! These are the kinds of deals that would be taking place. Why would a bank give you 7% while it can source the funds at 2%? And because there will be credit rationing, they will not need as much money/deposits as they do now!!! Wait until banks reject your money. They don't want even your salary to be paid through their bank just in case you refuse to withdraw and start demanding for 7%!!! You are looking at issues with a narrow field of vision. Banks have different products for different purposes. Banks do pay 7℅ and even more on deposits. If you ever held more than KShs 1m in your account, you would know because your bank would have begged you to fix deposit already at 7℅ or more. In fact CFC pays minimum 7℅ on all saving accounts. Currently, only depositors who can negotiate their rates and those who choose the right banks enjoy good rates. If the law extends the benefit to Wanjiku regardless of whether she negotiates her rate or chooses her bank carefully, it's a good law. Life is short. Live passionately.
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sparkly		#303 Posted : Saturday, August 13, 2016 11:01:25 AM
Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi		Obi 1 Kanobi wrote: MaichBlack wrote: And I can see most Wazuans have the villager mentality of "Banks are making billions" at the expense of mwananchi. When a bank with assets of 566 Billion makes a profit of 16 Billion, what is grand about that??? That is a MERE 2.83% ROA!!! But you can bet your average Kenyan will just see the 16 Billion! Financial literacy should be made compulsory in Primary and High School. It would serve people better than "If a train leaves mombasa at 9:00am and another one leaves Nairobi at 9:30am bla bla bla..." kind of questions. Don't be arrogant, stop prescribing for kenyans what you think they need. We are looking for solutions to real life problems and not lectures on the supply and demand curves. Most of the money banks lend belong to people and not bank owners as you are trying to tell us here. @Obi be careful with our brother @Maich. If you point out his ignorance of basic economics, he responds with insults. At this instance he does not grasp that banks are intermediaries. They collect money from brothers and sisters without immediate use and channel it to the brothers and sisters with immediate needs. Ideally they should just charge a commission for the transaction. Life is short. Live passionately.
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mlennyma		#304 Posted : Saturday, August 13, 2016 11:05:19 AM
Rank: Elder Joined: 7/21/2010 Posts: 6,194 Location: nairobi		sparkly wrote: Obi 1 Kanobi wrote: MaichBlack wrote: And I can see most Wazuans have the villager mentality of "Banks are making billions" at the expense of mwananchi. When a bank with assets of 566 Billion makes a profit of 16 Billion, what is grand about that??? That is a MERE 2.83% ROA!!! But you can bet your average Kenyan will just see the 16 Billion! Financial literacy should be made compulsory in Primary and High School. It would serve people better than "If a train leaves mombasa at 9:00am and another one leaves Nairobi at 9:30am bla bla bla..." kind of questions. Don't be arrogant, stop prescribing for kenyans what you think they need. We are looking for solutions to real life problems and not lectures on the supply and demand curves. Most of the money banks lend belong to people and not bank owners as you are trying to tell us here. @Obi be careful with our brother @Maich. If you point out his ignorance of basic economics, he responds with insults. At this instance he does not grasp that banks are intermediaries. They collect money from brothers and sisters without immediate use and channel it to the brothers and sisters with immediate needs. Ideally they should just charge a commission for the transaction. it's becoming emotive "Don't let the fear of losing be greater than the excitement of winning."
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Liv		#305 Posted : Saturday, August 13, 2016 11:07:49 AM
Rank: Veteran Joined: 11/14/2006 Posts: 1,311		sparkly wrote: MaichBlack wrote: githundi wrote: Liv wrote: githundi wrote: mlennyma wrote: githundi wrote: mlennyma wrote: githundi wrote: 3.These wanjikus who think they will benefit from low rates will be shocked to find out they will in first instance not qualify for a loan i can see how bitter you feel breaking your points a post after the other instead of a single script,how about earning more interest on deposits? Simple banks reaçtion; preference for huge fixed deposits from corporate and raise operating costs for Wanjikus accounts to cover for the lost revenue... Safaricom is an option for wanjikus small savings if banks raise operating expenses Yes,an option at zero interest rate. Not the 7 %..you are talking about.. I hear that some banks are likely to reduce deposits from Wanjiku, as there will be no need to receive expensive funds and lend them out in a high risk low return environment. So Wanjiku will not win with high returns on her deposits. Yes @ Liv. .that is what may happen Very true!!! These are the kinds of deals that would be taking place. Why would a bank give you 7% while it can source the funds at 2%? And because there will be credit rationing, they will not need as much money/deposits as they do now!!! Wait until banks reject your money. They don't want even your salary to be paid through their bank just in case you refuse to withdraw and start demanding for 7%!!! You are looking at issues with a narrow field of vision. Banks have different products for different purposes. Banks do pay 7℅ and even more on deposits. If you ever held more than KShs 1m in your account, you would know because your bank would have begged you to fix deposit already at 7℅ or more. In fact CFC pays minimum 7℅ on all saving accounts. Currently, only depositors who can negotiate their rates and those who choose the right banks enjoy good rates. If the law extends the benefit to Wanjiku regardless of whether she negotiates her rate or chooses her bank carefully, it's a good law. It is good law for Wanjiku, but the banks will be able to collect funds from other countries at a lower interest rates. The multinanational banks will just get cheaper funds from elsewhere to led to their corporate customers. For banks like SCB and Barclays. I would guess they would rather bring shareholder funds to be loaned to the local banks rather than take expensive deposits.... Same way corporates like EABL borrow from their parent company Diageo at near market rates rather than borrowing locally.
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Liv		#306 Posted : Saturday, August 13, 2016 11:14:41 AM
Rank: Veteran Joined: 11/14/2006 Posts: 1,311		Obi 1 Kanobi wrote: MaichBlack wrote: And I can see most Wazuans have the villager mentality of "Banks are making billions" at the expense of mwananchi. When a bank with assets of 566 Billion makes a profit of 16 Billion, what is grand about that??? That is a MERE 2.83% ROA!!! But you can bet your average Kenyan will just see the 16 Billion! Financial literacy should be made compulsory in Primary and High School. It would serve people better than "If a train leaves mombasa at 9:00am and another one leaves Nairobi at 9:30am bla bla bla..." kind of questions. Don't be arrogant, stop prescribing for kenyans what you think they need. We are looking for solutions to real life problems and not lectures on the supply and demand curves. Most of the money banks lend belong to people and not bank owners as you are trying to tell us here. Obi is right, most of what the banks call assets are deposits they have accumulated from their customers. It is different from amounts invested by the shareholders of the banks. It would however be interesting to see the magnitude of their Return on Capital employed (ROCE) excluding the customer deposits. @Maichblack, maybe you should consider this.
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aemathenge		#307 Posted : Saturday, August 13, 2016 11:34:16 AM
Rank: Elder Joined: 10/18/2008 Posts: 3,434 Location: Kerugoya		Madam Administrator, I believe it is time you put this question to a Vote. Let the Citizens vote on two questions: Should his Excellency The President accent to the Njomo (ahem) Bill? Yes or No. Should The Members of Parliament marshal a two thirds majority and make the Njomo Bill Law? Yes or No. Please hold a meeting with The Moderator about this vote because I perceive a turning point on this thread. It is about to go Green unless we all get a valve to vent off our respective frustrations. Are you up to it? https://mahegoat.wordpress.com
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Njung'e		#308 Posted : Saturday, August 13, 2016 12:09:28 PM
Rank: Elder Joined: 2/7/2007 Posts: 11,935 Location: Nairobi		aemathenge wrote: Madam Administrator, I believe it is time you put this question to a Vote. Let the Citizens vote on two questions: Should his Excellency The President accent to the Njomo (ahem) Bill? Yes or No. Should The Members of Parliament marshal a two thirds majority and make the Njomo Bill Law? Yes or No. Please hold a meeting with The Moderator about this vote because I perceive a turning point on this thread. It is about to go Green unless we all get a valve to vent off our respective frustrations. Are you up to it? Nothing will go green brother . Now, you just reminded me of what our law says. If son of Jomo doesn't sign, Mpigs might afterall pass this into a law. INTERESTING!!.. Would they? 100% yes. As for the vote, here is mine. I am 100% pro-capping. We can de-cap next year if it hurts Nothing great was ever achieved without enthusiasm.
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MaichBlack		#309 Posted : Saturday, August 13, 2016 12:19:17 PM
Rank: Elder Joined: 7/22/2009 Posts: 7,872		alma1 wrote: I know of a guy who took a 80k loan...He travelled out of the country. When he came back this year, he went to the bank, and found that he now owed 500k.. To make things worse, he went to another bank and found that his 200k he had left behind was now 5k... True story... These are the fellows you want us to protect with laws??? The fellow REFUSES to pay 80k yet he has 200k in the bank, disappears and wants to find business as usual?? Of course I don't support 200k going to 5k and I don't understand how that would happen (break it down for us. If it is those accounts you are supposed to pay a certain amount, say 1,200/= monthly and get services like standing orders etc. at no charge, he should not be surprised. Explain what happened to the 195k as per the Banks explanation). It is also not funny to have an 80k loan turn to 500k but again, was that due to high interest rates or refusal to pay??? Kindly give us an example of a person who took an 80k loan, paid as required and end up paying 500k. All these examples people are giving are for people who failed to pay the loans. Sijui nani took a loan in 1979 and in 1992 sijui the bank demanded how much. You took a loan and haven't been paying for 13 years??? Are you nuts??? Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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MaichBlack		#310 Posted : Saturday, August 13, 2016 12:22:10 PM
Rank: Elder Joined: 7/22/2009 Posts: 7,872		alma1 wrote: I'd rather have bad credit than pay some fool sijui 5 times what he lent me. My kids are more important than the bank. Wakae ni pesa zao. That's the spirit!!!! And that is what I have been saying all along. No one forces anyone to take a loan. Wachana na banks na loan zao! Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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