Creativity starts now. Credit cards will now be one of the holy grails for the banks. Expect a call on soon from your 'friendly bank'.

In my opinion, this law will force banks to work for their money. They will have to lend prudently by examining how the funds will be used in certain projects. This is a good thing for Wanjiku because they will be getting free financial advise in the process...basically, if the banker refuses to give you a loan, your idea probably sucks. Previously, they could afford to finance two bad projects for every five because the spreads were large enough.

JM has lost a cool BIRRION today. Tomorrow is another day he will take one for the team. His entire networth might be cut by half or worse by the time dust settles with this law. This is the flip side of the stock market. One day a politician can decide to cut your networth.

So where does wanjiku get her money from?

Mostly from Shylocks

The cause of this drastic bill is largely because Banks joined the Shylock business long ago - which they sanitize by using long words.

Even Equity, which started out as Wanjikus Bank, joined the Shylock club some years ago.

The Shilling was last at 101.40. I am sure Not many Folks were ready
to pop their heads above the Parapet today.

Today was the first Opportunity for the Stock Market to react to the
statement issued by the President re the Banking Amendment Act [2015].
The Reaction was brutal and ugly.
The Nairobi All Share slumped -5.01% to close at 139.14
The Nairobi NSE20 crashed -4.41% lower to close at 3309.76 a level
last reached in March 2012.
As I said August 8th ''we have entered a new populist normal.
Politicians the World over are having to wrestle this [populist] tiger
by its tail''
The President evidently was convinced that Parliament would return the
Bill to him [if he were to reject it] with a super-majority and that
Political response was probably perceived to diminish his ''populist''
bona fides.
The Bill is in my opinion the equivalent of using a Sledge-Hammer to
crack a nut.
Banks will surely park their money in ''risk-free'' GOK Bills and Bonds.
Small Banks [who were already struggling] are effectively out of the market.
I find it difficult to see this Bill being operationalised in its
present format or that lashings and lashings of credit are going to be
made available at 14.5%.
The Collateral damage as we are witnessing today is vicious and should
give policy makers pause for thought.
Banking Shares were a Sea of red.

Inaitwa thinking forward
People see 2% per month as cheap but cummulatively you can double you starting capital by the end of the year.

For instance, clause 33(B) (a) reads “the maximum interest rate chargeable for a credit facility in Kenya at no more than four per cent, the base rate set by the Central Bank of Kenya”.

A strict reading suggests that this number will be only four per cent of the base rate, which at 10 per cent would mean that it is mathematically 0.4 per cent.

The advocacy by those who supported the law shows that the intended effect was a four percentage point added to the base rate which would make it four per cent plus 10 per cent.

If not corrected, financial institutions could argue sensibly that this part of the law is incapable of being implemented considering that that rate would be far below the inflation rate.

Coop @ 9 ? That's too expensive. Their 2016 eps will be down by around 30%.