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Law Capping interest rates
Rank: Elder Joined: 2/26/2012 Posts: 15,980
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alma1 wrote:murchr wrote:alma1 wrote:Liv wrote:I am against capping of interest rates.
Hypothesis:
The biggest problem we have in kenya and africa is Market availability. We don't have critical mass in demand for most products. Our middle class in Kenya as many other countries is not big enough to consume that would justify mass production of many things. Anyone investing in anything has this in mind.... The market is limited and so most of the investments here are high risk..... This results is high product and service prices to ensure high return.
Banks are not an exception and they receive limited proposals to lend in projects that can make real money for the investors and make returns for them. Because the market for loans is not huge the price of loans is high. The only people who take huge loans are big corporates who are able to negotiate their loans rates close to TB rates. Other than those Wanjiku and SMES do not borrow much as they have no projects that can rely require a lot of money. Most Wanjikus borrow for building projects..... But the middle class is not expanding fast enough to take all the buildings that come to the market...... Low market demand. This is replicated in most sectors of our economy.
Solution:
The government and parliament should look into how to grow the economy in order to expand the middle class and market demand for products and services. If the economy grows at 10% it could shift 500,000 to 1 million or more people from poverty to middle class every year creating demand for products. That would require investment in agriculture and other sectors where most Kenyans operate in order to increase production and export more in order to raise incomes. Higher demand would result in lower production costs generally in a competitive market.
The government should stop borrowing too. Government of Kenya and MPs are living beyond their means. Why do we have to borrow so much to spend in recurrent expenditure? That is the problem, the banks are just reacting to the environment. Remember those days when TB rates were circa 2 %, banks were giving loans at 10-12 %p.a. I remember mortgage by SCB being offered at a fixed rate of less than 9.9%. Those were Kibaki days, economic growth shot up to 7% in 2007 before the PEV set in.
Capping the interest rates will not solve our problems. One of the likely outcome maybe capital flight and and if that happens soon the dollar may hit Kes 150- 200 each.... Then massive inflation, and other social evils that come with it. Returns for owners of capital will not increase but reduce if we cap the interest rates.
Required
Critic constructively (50%) Ahhh now I understand it. What you are saying is that the Kenyatta gov't is worse than the Kibaki and nusu mkate gov't. Somehow within 4 years, Uhuru and his gov't has managed to shrink the economy and lowered demand for bank loans. I'm just happy to see that you agree with what we have been saying all along. Uhuru sio Kibaki. Alma you are out of order and digressing. Liv has solid points give a counter argument and support it. on the contrary murchr, I am on point. I'm actually following the point Liv is making to the dot. Her argument is something to do with the economy shrinking and gov't borrowing causing these interest rates. She then goes on to compare Kibaki's interest rates to Uhuru's interest rates. I am not the one who brought this up, she did.We the rest of the holloi polloi have been saying that banks are corrupt and engaging in illegal shylocking. So we want them tamed. But it seems she knows something we don't. It's either the banks are shylocks or Uhuru's gov't policies are increasing interest ratesYou can't have your cake and eat it too. I fail to see where I'm out of order in this. I actually agree with her. If Uhuru's gov't continues borrowing at the rate it is doing, no amount of capping shall help. The gov't must stop borrowing to fund these useless projects. One of the projects being rewarding Mpigs with more salaries. The gov't is Uhuru's gov't....Ama ulitaka niseme it's Raira's? Mkate nusu govt came after PEV. Back to the argument. Believe it or not, our problems started after the govt grew to accomodate egos "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Elder Joined: 9/19/2015 Posts: 2,871 Location: hapo
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Didn't know that about nusu mkate....uzee umefika. There are two possible causes for this 1. The populist - banks are thieves 2. the gov't is going crazy buying mercedes benzes None of them are good for the gov't. Banks are thieves simply because they are allowed to be. The solution to this is very simple..Sign that bill. Gov't is buying mercedes benzes is a very dangerous argument. Usually when gov't spends for projects, there should be an influx of cash in the ground. So where's the gov't money going to? If gov't is spending willy nilly then the solution is they stop. I don't need we need a law degree to understand these two principles. My view is that both have to happen. Banks are crazy in Kenya to say the least. The gov't is also throwing away money like crazy... I'm waiting to see the reason for Uhuru to take back the law to parliament. He's not going to sign it. Then I wait to see what cord Mp's shall do...Usually they run away from parliament then go making noise at Uhuru park. Then see what jubilee mp's shall do...their voters are the heaviest borrowers aka defaulters. Thieves are not good people. Tumeelewana?
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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alma1 wrote:Didn't know that about nusu mkate....uzee umefika.
There are two possible causes for this
1. The populist - banks are thieves
2. the gov't is going crazy buying mercedes benzes
None of them are good for the gov't.
Banks are thieves simply because they are allowed to be. The solution to this is very simple..Sign that bill.
Gov't is buying mercedes benzes is a very dangerous argument. Usually when gov't spends for projects, there should be an influx of cash in the ground. So where's the gov't money going to?
If gov't is spending willy nilly then the solution is they stop.
I don't need we need a law degree to understand these two principles.
My view is that both have to happen. Banks are crazy in Kenya to say the least. The gov't is also throwing away money like crazy...
I'm waiting to see the reason for Uhuru to take back the law to parliament. He's not going to sign it.
Then I wait to see what cord Mp's shall do...Usually they run away from parliament then go making noise at Uhuru park. Then see what jubilee mp's shall do...their voters are the heaviest borrowers aka defaulters. Govt is not buying but leasing cars, taking away the maintenance responsibility. Back to banks. "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Elder Joined: 9/19/2015 Posts: 2,871 Location: hapo
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murchr wrote:alma1 wrote:Didn't know that about nusu mkate....uzee umefika.
There are two possible causes for this
1. The populist - banks are thieves
2. the gov't is going crazy buying mercedes benzes
None of them are good for the gov't.
Banks are thieves simply because they are allowed to be. The solution to this is very simple..Sign that bill.
Gov't is buying mercedes benzes is a very dangerous argument. Usually when gov't spends for projects, there should be an influx of cash in the ground. So where's the gov't money going to?
If gov't is spending willy nilly then the solution is they stop.
I don't need we need a law degree to understand these two principles.
My view is that both have to happen. Banks are crazy in Kenya to say the least. The gov't is also throwing away money like crazy...
I'm waiting to see the reason for Uhuru to take back the law to parliament. He's not going to sign it.
Then I wait to see what cord Mp's shall do...Usually they run away from parliament then go making noise at Uhuru park. Then see what jubilee mp's shall do...their voters are the heaviest borrowers aka defaulters. Govt is not buying but leasing cars, taking away the maintenance responsibility. Back to banks. Murchr, stop running Obviously going by Liv's argument, gov't is spending money on something. Spending more than Kibaki on something. What is it? If you want to cap interest rates its easy. Reduce gov't borrowing. If that is not good enough then the only other solution is to cap them rates in a bill. I don't know why we are even discussing this issue. If Uhuru's gov't won't stop borrowing, the rates shall continue rising. If they decide not to stop then at least let them save adhiambo by stopping the shylock banks. Easy stuff as Trump would say. Thieves are not good people. Tumeelewana?
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Rank: Elder Joined: 10/18/2008 Posts: 3,434 Location: Kerugoya
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@Liv, my Dear, I beg to differ. The Government consists of three arms, if I remember my old system Primary School Civics. The Executive, The Legislature, The Judiciary, @Liv has it that The Current Executive has failed to put in place or execute policies that collectively would have tamed the usurious Kenyan Banking Interest Rates. Actually, The Executive benefits through collecting taxes from this usury for: Sweetie to share with her salon attendant; Paying the author of “Tyranny of Numbers” for non-existent invoices; Buying turbo charged wheelbarrows; Fuelling Kenya Air Force One to land in as many International Airports (No not the Wazuan airports) as possible; Sitting members of The Executive are big shareholders; Giving Commissioners of the INDEPENDENT Boundaries and Erections Commission golden, silver, diamond and platinum handshakes. Ad infinitum. The Judiciary have its knickers in a twist currently. They do not even have a substantive Chief Justice. As such, no succour is available from there. As a result, The Legislature, in its infinite wisdom, has taken upon itself to tame this usurious Mother Vampire through what it does best. The Njomo Bill. This time, The Legislature wants to finish what they started with the Donde Bill. No more hanky punkie from the Kenyan Banks. In a nutshell @Liv, this is no longer an Economic, Financial, or sanity decision. It is purely political with all the baggage this entails within the boundaries of the Republic of Kenya.
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Rank: Elder Joined: 6/23/2009 Posts: 14,320 Location: nairobi
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aemathenge wrote:@Liv, my Dear, I beg to differ.
The Government consists of three arms, if I remember my old system Primary School Civics.
The Executive,
The Legislature,
The Judiciary,
@Liv has it that The Current Executive has failed to put in place or execute policies that collectively would have tamed the usurious Kenyan Banking Interest Rates.
Actually, The Executive benefits through collecting taxes from this usury for:
Sweetie to share with her salon attendant;
Paying the author of “Tyranny of Numbers” for non-existent invoices;
Buying turbo charged wheelbarrows;
Fuelling Kenya Air Force One to land in as many International Airports (No not the Wazuan airports) as possible;
Sitting members of The Executive are big shareholders;
Giving Commissioners of the INDEPENDENT Boundaries and Erections Commission golden, silver, diamond and platinum handshakes.
Ad infinitum.
The Judiciary have its knickers in a twist currently. They do not even have a substantive Chief Justice. As such, no succour is available from there.
As a result, The Legislature, in its infinite wisdom, has taken upon itself to tame this usurious Mother Vampire through what it does best. The Njomo Bill.
This time, The Legislature wants to finish what they started with the Donde Bill. No more hanky punkie from the Kenyan Banks.
In a nutshell @Liv, this is no longer an Economic, Financial, or sanity decision.
It is purely political with all the baggage this entails within the boundaries of the Republic of Kenya.
@aemathenge soooo true. this bill shall be passed COOP, IMH, KEGN, KQ, MTNU
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Rank: Member Joined: 1/30/2016 Posts: 332 Location: Rift Valley
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aemathenge wrote:
As a result, The Legislature, in its infinite wisdom, has taken upon itself to tame this usurious Mother Vampire through what it does best. The Njomo Bill.
This time, The Legislature wants to finish what they started with the Donde Bill. No more hanky punkie from the Kenyan Banks.
Linking wisdom with what goes on in parliament is a stretch of the imagination.
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Rank: Elder Joined: 10/18/2008 Posts: 3,434 Location: Kerugoya
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chemirocha wrote:aemathenge wrote:
As a result, The Legislature, in its infinite wisdom, has taken upon itself to tame this usurious Mother Vampire through what it does best. The Njomo Bill.
This time, The Legislature wants to finish what they started with the Donde Bill. No more hanky punkie from the Kenyan Banks.
Linking wisdom with what goes on in parliament is a stretch of the imagination. ... and irony is wasted on you, Kind Sir. Irony, by the way, is the expression of one's meaning by using language that normally signifies the opposite, typically for humorous or emphatic effect.
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Rank: Elder Joined: 6/23/2009 Posts: 14,320 Location: nairobi
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Let us all dedicate our prayers to the sign off of the Njomo bill. Kenya needs this COOP, IMH, KEGN, KQ, MTNU
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Rank: Member Joined: 9/11/2015 Posts: 245 Location: Thika
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There are two ways that are likely to result. The president will fail to sign the bill and say that the banks are already self-regulating although we all know that this is temporary before they revert to high rates. An MOU means nothing if it is not made into law. The second scenario will be that the president will propose certain amendments, among them will be raising the maximum rate to above 20% (say 22%) which essentially means that the new law will not hurt banks and will be useless to citizens. Since men have learned to shoot without missing, I have learned to fly without perching
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