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Law Capping interest rates
Rank: Elder Joined: 6/23/2009 Posts: 14,320 Location: nairobi
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Jon Jones wrote: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. The DP is on record stating that we should be closer to single digit lending COOP, IMH, KEGN, KQ, MTNU
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Rank: Veteran Joined: 8/28/2015 Posts: 1,247
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Baratang wrote:About financials, I know nothing much except adding and subtracting moneya and calculations on simple and compound interest. The rest, totally blank.
Could someone educate me on this;
In january to march 2015 the interest rates were in the region of 13% to 16% and the major banks posted more than kshs 5 billion in profits. So did the small financial institutions make huge profits. Right now, the interest rates are at 26%, so I expect the big banks to make at least kshs 7 to 9 billion in profits! According to the banks association capping the rate to 14.5% will be disastrous to the economy yet in 2015 when the interest rate was 14% there was nothing like economic disaster. I feel some idiot is pulling my leg!
The association is also telling us that capping the interest rate at 14.5% the SME becomes more risky to lend money to. Here someone tell me, is it more risky to lend money to SMEs at 14.5% or at 26%? Also are we having more people borrowing at 26% as compared to 14.5%? The association also claimed that capping the interest rates at 14.5% may scare away potential investors. I ask, who are those investors who are scared by low interests rates, apart from the banks themselves? Eish!!
I believe more than 70% of the banks are owned by foreigners who do not care if you are milked dry or bleed to death through these astronomical interest rates.
Don't bash me because of the outrageous reasoning, I am not educated on matters financials or economics.
men, you are the Keynes's of the 21st century. tell them off to hell. money multiplier effect works wonders in money markets unlike consumable goods like fuel. Sacco's are doing wonders. only that with the rapid expansion of our economy they have hit bottlenecks in meeting growing and diverse customer needs. for instance long term debts are not a preserve of Sacco's purely on regulatory requirements (mainly duration) and capital base. however this is changing very fast and bankers are up for a treat sooner. sacco have better kyc approaches and thus better able to match customers based risk to their lending terms. banks are lazy thugs, no more no less. even mpsea can do better than banks by just securing ur mswari advances on history of your line. about citizenry education, Kenya prides its self with high literacy levels and born economists like ukuyus, wakaush and many others. Shinda nikuthiotorwa onginya utigwo outari kinya ntanta(drop) yathakame approach by the banks. this law/ approach is a stroke of ingenuity to Kenyan economy. Kenyans have a high available bankable population, aggressive savers and investors that has not been banked purely because banking is not an affordable service to economically savy kenyans. the npls are purely engineered by bankers to frustrate the effort of the ordinary folk. floating interest rates (upward only) make no sense at all if the high interest rates are justified by loannee high risk factor kam insured loans that are heavily collateralised. skewed/ lopsided bank loan contracts leaves the borrower more tempted to default than pay due to frustration. first installment falls due together with interest before you touch the loanned money. loan processing fees is paid even before your loan is approved. cap this bullshit, I will keep my money where it so pleases. and borrow affordably when i NEED. Eish, off my chest men. ,Behold, a sower went forth to sow;....
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Rank: Veteran Joined: 8/28/2015 Posts: 1,247
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tom_boy wrote:Wanjiku does not have to benefit directly from low interest rates. SME's and businesses that qualify for the loans will benefit tremendously, expand and employ more Wanjiku's, export more and grow the economy.
The current situation promotes usurious rates to Wanjiku through mobile phones while starving SME' s and established business from getting loans at reasonable rates. The bankers know this but they dont care as long as they are making money.
Kenya will be 100 times better with interest rate controll. If banks refuse to take Wanjikus money, I can promise you she will find other places to put it. @tm. its quite simple. banks won't lend anymore to wanjikus so SME will lend. SMEs demand for money will be unment since smes wont get. redit from banks or accept deposits from wanjiku, argh so SMEs will join the gems or alike do introduction and Wanjiku will become an investor pap. this whole story is just sweet and all good for the economy and not the multinationals. so @tm u can imagine @mwb and runing our @tomwamuandibeu SME and giving the big boys a run for their chums banking the un-banked bankables. in the mean tym, I throw my dice on the ring. jubilee or chungwa men. tomorrow is another mans day. ,Behold, a sower went forth to sow;....
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Rank: Veteran Joined: 8/28/2015 Posts: 1,247
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tom_boy wrote:Wanjiku does not have to benefit directly from low interest rates. SME's and businesses that qualify for the loans will benefit tremendously, expand and employ more Wanjiku's, export more and grow the economy.
The current situation promotes usurious rates to Wanjiku through mobile phones while starving SME' s and established business from getting loans at reasonable rates. The bankers know this but they dont care as long as they are making money.
Kenya will be 100 times better with interest rate controll. If banks refuse to take Wanjikus money, I can promise you she will find other places to put it. @tomboy. its quite simple. banks won't lend anymore to wanjikus, so SME will lend will be wanjikus option. SMEs demand for money to lend wanjiku will be unment since smes will be in need to meet increased credit demand from wanjiku and sme wont get any credit from banks or accept deposits from wanjiku demanding guaranteed 7% interest rate, argh so SMEs will join the gems or alike do introduction and Wanjiku will become an investor pap. this whole story is just sweet and all so good for the economy and not the multinationals. so @tomboy u can imagine @mwb and u runing our @tomboywamuandibeu SME and giving the big boys a run for their chums banking the un-banked bankables. in the mean tym, I throw my dice on the ring. jubilee or chungwa men. tomorrow is another mans day. ,Behold, a sower went forth to sow;....
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Rank: Member Joined: 2/20/2007 Posts: 767
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Wanjiku does not have to benefit directly from low interest rates. SME's and businesses that qualify for the loans will benefit tremendously, expand and employ more Wanjiku's, export more and grow the economy. The current situation promotes usurious rates to Wanjiku through mobile phones while starving SME' s and established business from getting loans at reasonable rates. The bankers know this bit they dont care as long as they are making money. Kenya will be 100 times better with interest rate controll. If banks refuse to take Wanjikus money, I can promise you she will find other places to put it. They must find it difficult....... those who have taken authority as the truth, rather than truth as the authority. -G. Massey.
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Rank: Elder Joined: 6/23/2009 Posts: 14,320 Location: nairobi
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muandiwambeu wrote:Baratang wrote:About financials, I know nothing much except adding and subtracting moneya and calculations on simple and compound interest. The rest, totally blank.
Could someone educate me on this;
In january to march 2015 the interest rates were in the region of 13% to 16% and the major banks posted more than kshs 5 billion in profits. So did the small financial institutions make huge profits. Right now, the interest rates are at 26%, so I expect the big banks to make at least kshs 7 to 9 billion in profits! According to the banks association capping the rate to 14.5% will be disastrous to the economy yet in 2015 when the interest rate was 14% there was nothing like economic disaster. I feel some idiot is pulling my leg!
The association is also telling us that capping the interest rate at 14.5% the SME becomes more risky to lend money to. Here someone tell me, is it more risky to lend money to SMEs at 14.5% or at 26%? Also are we having more people borrowing at 26% as compared to 14.5%? The association also claimed that capping the interest rates at 14.5% may scare away potential investors. I ask, who are those investors who are scared by low interests rates, apart from the banks themselves? Eish!!
I believe more than 70% of the banks are owned by foreigners who do not care if you are milked dry or bleed to death through these astronomical interest rates.
Don't bash me because of the outrageous reasoning, I am not educated on matters financials or economics.
men, you are the Keynes's of the 21st century. tell them off to hell. money multiplier effect works wonders in money markets unlike consumable goods like fuel. Sacco's are doing wonders. only that with the rapid expansion of our economy they have hit bottlenecks in meeting growing and diverse customer needs. for instance long term debts are not a preserve of Sacco's purely on regulatory requirements (mainly duration) and capital base. however this is changing very fast and bankers are up for a treat sooner. sacco have better kyc approaches and thus better able to match customers based risk to their lending terms. banks are lazy thugs, no more no less. even mpsea can do better than banks by just securing ur mswari advances on history of your line. about citizenry education, Kenya prides its self with high literacy levels and born economists like ukuyus, wakaush and many others. Shinda nikuthiotorwa onginya utigwo outari kinya ntanta(drop) yathakame approach by the banks. this law/ approach is a stroke of ingenuity to Kenyan economy. Kenyans have a high available bankable population, aggressive savers and investors that has not been banked purely because banking is not an affordable service to economically savy kenyans. the npls are purely engineered by bankers to frustrate the effort of the ordinary folk. floating interest rates (upward only) make no sense at all if the high interest rates are justified by loannee high risk factor kam insured loans that are heavily collateralised. skewed/ lopsided bank loan contracts leaves the borrower more tempted to default than pay due to frustration. first installment falls due together with interest before you touch the loanned money. loan processing fees is paid even before your loan is approved. cap this bullshit, I will keep my money where it so pleases. and borrow affordably when i NEED. Eish, off my chest men. LOL.. What a tirade.. But true COOP, IMH, KEGN, KQ, MTNU
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Rank: Elder Joined: 7/22/2009 Posts: 7,910
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May be I comment next after Thursday 18th August 2016 - After the bill is not signed!! 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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Rank: Elder Joined: 12/25/2014 Posts: 2,301 Location: kenya
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muandiwambeu wrote:Baratang wrote:About financials, I know nothing much except adding and subtracting moneya and calculations on simple and compound interest. The rest, totally blank.
Could someone educate me on this;
In january to march 2015 the interest rates were in the region of 13% to 16% and the major banks posted more than kshs 5 billion in profits. So did the small financial institutions make huge profits. Right now, the interest rates are at 26%, so I expect the big banks to make at least kshs 7 to 9 billion in profits! According to the banks association capping the rate to 14.5% will be disastrous to the economy yet in 2015 when the interest rate was 14% there was nothing like economic disaster. I feel some idiot is pulling my leg!
The association is also telling us that capping the interest rate at 14.5% the SME becomes more risky to lend money to. Here someone tell me, is it more risky to lend money to SMEs at 14.5% or at 26%? Also are we having more people borrowing at 26% as compared to 14.5%? The association also claimed that capping the interest rates at 14.5% may scare away potential investors. I ask, who are those investors who are scared by low interests rates, apart from the banks themselves? Eish!!
I believe more than 70% of the banks are owned by foreigners who do not care if you are milked dry or bleed to death through these astronomical interest rates.
Don't bash me because of the outrageous reasoning, I am not educated on matters financials or economics.
men, you are the Keynes's of the 21st century. tell them off to hell. money multiplier effect works wonders in money markets unlike consumable goods like fuel. Sacco's are doing wonders. only that with the rapid expansion of our economy they have hit bottlenecks in meeting growing and diverse customer needs. for instance long term debts are not a preserve of Sacco's purely on regulatory requirements (mainly duration) and capital base. however this is changing very fast and bankers are up for a treat sooner. sacco have better kyc approaches and thus better able to match customers based risk to their lending terms. banks are lazy thugs, no more no less. even mpsea can do better than banks by just securing ur mswari advances on history of your line. about citizenry education, Kenya prides its self with high literacy levels and born economists like ukuyus, wakaush and many others. Shinda nikuthiotorwa onginya utigwo outari kinya ntanta(drop) yathakame approach by the banks. this law/ approach is a stroke of ingenuity to Kenyan economy. Kenyans have a high available bankable population, aggressive savers and investors that has not been banked purely because banking is not an affordable service to economically savy kenyans. the npls are purely engineered by bankers to frustrate the effort of the ordinary folk. floating interest rates (upward only) make no sense at all if the high interest rates are justified by loannee high risk factor kam insured loans that are heavily collateralised. skewed/ lopsided bank loan contracts leaves the borrower more tempted to default than pay due to frustration. first installment falls due together with interest before you touch the loanned money. loan processing fees is paid even before your loan is approved. cap this bullshit, I will keep my money where it so pleases. and borrow affordably when i NEED. Eish, off my chest men. @BARATANG I SALUTE YOU AND HATS OFF IN RESPECT . Your simple explanation makes me imagine you know alot than just what you said.i didn't have an inner depth thinking as you but on surface I knew there is a rip off somewhere. @muandiwambeu I think I got your handle right I say sacco is better !!! You are right
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Rank: Veteran Joined: 11/13/2015 Posts: 1,658
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muandiwambeu wrote:Baratang wrote:About financials, I know nothing much except adding and subtracting moneya and calculations on simple and compound interest. The rest, totally blank.
Could someone educate me on this;
In january to march 2015 the interest rates were in the region of 13% to 16% and the major banks posted more than kshs 5 billion in profits. So did the small financial institutions make huge profits. Right now, the interest rates are at 26%, so I expect the big banks to make at least kshs 7 to 9 billion in profits! According to the banks association capping the rate to 14.5% will be disastrous to the economy yet in 2015 when the interest rate was 14% there was nothing like economic disaster. I feel some idiot is pulling my leg!
The association is also telling us that capping the interest rate at 14.5% the SME becomes more risky to lend money to. Here someone tell me, is it more risky to lend money to SMEs at 14.5% or at 26%? Also are we having more people borrowing at 26% as compared to 14.5%? The association also claimed that capping the interest rates at 14.5% may scare away potential investors. I ask, who are those investors who are scared by low interests rates, apart from the banks themselves? Eish!!
I believe more than 70% of the banks are owned by foreigners who do not care if you are milked dry or bleed to death through these astronomical interest rates.
Don't bash me because of the outrageous reasoning, I am not educated on matters financials or economics.
men, you are the Keynes's of the 21st century. tell them off to hell. money multiplier effect works wonders in money markets unlike consumable goods like fuel. Sacco's are doing wonders. only that with the rapid expansion of our economy they have hit bottlenecks in meeting growing and diverse customer needs. for instance long term debts are not a preserve of Sacco's purely on regulatory requirements (mainly duration) and capital base. however this is changing very fast and bankers are up for a treat sooner. sacco have better kyc approaches and thus better able to match customers based risk to their lending terms. banks are lazy thugs, no more no less. even mpsea can do better than banks by just securing ur mswari advances on history of your line. about citizenry education, Kenya prides its self with high literacy levels and born economists like ukuyus, wakaush and many others. Shinda nikuthiotorwa onginya utigwo outari kinya ntanta(drop) yathakame approach by the banks. this law/ approach is a stroke of ingenuity to Kenyan economy. Kenyans have a high available bankable population, aggressive savers and investors that has not been banked purely because banking is not an affordable service to economically savy kenyans. the npls are purely engineered by bankers to frustrate the effort of the ordinary folk. floating interest rates (upward only) make no sense at all if the high interest rates are justified by loannee high risk factor kam insured loans that are heavily collateralised. skewed/ lopsided bank loan contracts leaves the borrower more tempted to default than pay due to frustration. first installment falls due together with interest before you touch the loanned money. loan processing fees is paid even before your loan is approved. cap this bullshit, I will keep my money where it so pleases. and borrow affordably when i NEED. Eish, off my chest men. Hope that is sarcasm  Kenyans are shitty savers we spend 99% of our income. Actually most kenyans have their estates summarily administered by the public trustee usually worth less than 250K(a whole lifetime of savings). Majority of bank account 90% are below 100,000/=. Our pension assets are only kshs 807b approx $8b with our GDP of $64b
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Rank: Elder Joined: 6/23/2009 Posts: 14,320 Location: nairobi
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On 29.08.2016 we shall find out from HE Uhuru Kenyatta.. COOP, IMH, KEGN, KQ, MTNU
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