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Law Capping interest rates
Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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enyands wrote:I'm paying that loan at end of month not year For a normal wanjiku, they will be borrowing 7500 every month and paying a mere 293 every month! If Obiero did it, Who Am I?
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Rank: Elder Joined: 7/28/2015 Posts: 9,562 Location: Rodi Kopany, Homa Bay
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Nope. At the end of the year wanjiku would have paid about 3500 for a loan of 86450, that is if she takes a loan each month.
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Rank: Elder Joined: 9/20/2015 Posts: 2,811 Location: Mombasa
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The facts are very clear. Numbers don't lie. 48% p.a is far away out of proportion disguised as one-off commitment fee to defeat the new law of interest rate cap. John 5:17 But Jesus replied, “My Father is always working, and so am I.”
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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Swenani wrote:enyands wrote:I'm paying that loan at end of month not year For a normal wanjiku, they will be borrowing 7500 every month and paying a mere 293 every month! Where is the principal amount in your monthly payment or principal amount is free
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Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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hardwood wrote:Nope. At the end of the year wanjiku would have paid about 3500 for a loan of 86450, that is if she takes a loan each month. Ulisomea compounding kwa dirisha? Try to annualize the loan adn the interest. Wanjiku has not borrowed 7500*12=90,000 but has only borrowed 7,500 annually and paid an interest of 3500 annually If Obiero did it, Who Am I?
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Rank: Elder Joined: 3/19/2010 Posts: 3,504 Location: Uganda
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48% still better than 90% by mshwari, remember these loans are mostly for emergencies and there is a likelihood of not taking it on a monthly basis. The point is Wanjiku was to be locked out of credit facilities because she is too risky but this has not happened. People are really waiting to say' I told you ' If Wanjiku gets an emergency once a year or borrows in small chunks of 500to 7500= pa, what is the annualised rate? punda amecheka
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Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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newfarer wrote:48% still better than 90% by mshwari, remember these loans are mostly for emergencies and there is a likelihood of not taking it on a monthly basis. The point is Wanjiku was to be locked out of credit facilities because she is too risky but this has not happened. People are really waiting to say' I told you '
If Wanjiku gets an emergency once a year or borrows in small chunks of 500to 7500= pa, what is the annualised rate? If you annualize the 7500 p.m repaymets, the principal amount works to aprox 61K. If Obiero did it, Who Am I?
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Rank: Elder Joined: 2/27/2007 Posts: 2,768
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Swenani wrote:newfarer wrote:48% still better than 90% by mshwari, remember these loans are mostly for emergencies and there is a likelihood of not taking it on a monthly basis. The point is Wanjiku was to be locked out of credit facilities because she is too risky but this has not happened. People are really waiting to say' I told you '
If Wanjiku gets an emergency once a year or borrows in small chunks of 500to 7500= pa, what is the annualised rate? If you annualize the 7500 p.m repaymets, the principal amount works to aprox 61K. @swenani.Could you please work out for me how much interest I will pay at the end of the year if I have to borrow kshs 7500.00 each and every month. Whatever you are trying to explain is not conciding with the actual situation on the ground. What I outlined above is the very simple basic and authentic situation and not theory..Have a look again and let us have your own calculations to disagree with mine. Quote:@guru267...wewe ulisomea hesabu wapi?
Let us look at your fallacy...
In September 2016 @newfarer takes a loan of kshs 7500 and pays kshs 293.25 being interest totalling kshs 7500.00 in payment after one month..
in October 2016 he will take another loan of kshs 7206.75 and pay kshs 293.25 in interest again totaling kshs 7500.00 in payment after another month.
In November 2016 another one of kshs 7206.75 at kshs 293.25 as interest.
Assuming that @newfarer will be taking a loan on a monthly basis, after one year @newfarer will have borrowed kshs 7206.75 x 12 = kshs 86,481.00 and the total interest will be kshs 293.25 x 12 = kshs 3519.00 for the year.
therefore average interest rate for newfarer alone on money borrowed in one year will be (3519/86,481) x 100% = 4.069%
Let me also remove that false reasoning that people are peddling here about mshwari loans at 7.5% per month interest adds to 90% per year...this is total rubbish!!! Why?
I borrow kshs 6000.00 at 7.5% interest or kshs 450.00 after one month.
In one year, I will have borrowed a total of kshs 6000.00 x 12 = 72,000.00 and the total interest will be kshs 450.00 x 12 = kshs 5400.00.
Average interest rate that has been charged on all the moneys borrowed within the year is (5400/72,000) x 100% = 7.5% for the year.
Actually in both the cases Wanjiku is benefitting immensely, only that KCB Mpesa is lower in interest. ...besides, the presence of a safe alone does not signify that there is money inside...
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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Kaigangio wrote:Swenani wrote:newfarer wrote:48% still better than 90% by mshwari, remember these loans are mostly for emergencies and there is a likelihood of not taking it on a monthly basis. The point is Wanjiku was to be locked out of credit facilities because she is too risky but this has not happened. People are really waiting to say' I told you '
If Wanjiku gets an emergency once a year or borrows in small chunks of 500to 7500= pa, what is the annualised rate? If you annualize the 7500 p.m repaymets, the principal amount works to aprox 61K. @swenani.Could you please work out for me how much interest I will pay at the end of the year if I have to borrow kshs 7500.00 each and every month. Whatever you are trying to explain is not conciding with the actual situation on the ground. What I outlined above is the very simple basic and authentic situation and not theory..Have a look again and let us have your own calculations to disagree with mine. Quote:@guru267...wewe ulisomea hesabu wapi?
Let us look at your fallacy...
In September 2016 @newfarer takes a loan of kshs 7500 and pays kshs 293.25 being interest totalling kshs 7500.00 in payment after one month..
in October 2016 he will take another loan of kshs 7206.75 and pay kshs 293.25 in interest again totaling kshs 7500.00 in payment after another month.
In November 2016 another one of kshs 7206.75 at kshs 293.25 as interest.
Assuming that @newfarer will be taking a loan on a monthly basis, after one year @newfarer will have borrowed kshs 7206.75 x 12 = kshs 86,481.00 and the total interest will be kshs 293.25 x 12 = kshs 3519.00 for the year.
therefore average interest rate for newfarer alone on money borrowed in one year will be (3519/86,481) x 100% = 4.069%
Let me also remove that false reasoning that people are peddling here about mshwari loans at 7.5% per month interest adds to 90% per year...this is total rubbish!!! Why?
I borrow kshs 6000.00 at 7.5% interest or kshs 450.00 after one month.
In one year, I will have borrowed a total of kshs 6000.00 x 12 = 72,000.00 and the total interest will be kshs 450.00 x 12 = kshs 5400.00.
Average interest rate that has been charged on all the moneys borrowed within the year is (5400/72,000) x 100% = 7.5% for the year.
Actually in both the cases Wanjiku is benefitting immensely, only that KCB Mpesa is lower in interest. The math is correct if he borrows 7,500 and repays 7,500 every month. Life is short. Live passionately.
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Rank: Elder Joined: 10/3/2008 Posts: 4,057 Location: Gwitu
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sparkly wrote:Kaigangio wrote:Swenani wrote:newfarer wrote:48% still better than 90% by mshwari, remember these loans are mostly for emergencies and there is a likelihood of not taking it on a monthly basis. The point is Wanjiku was to be locked out of credit facilities because she is too risky but this has not happened. People are really waiting to say' I told you '
If Wanjiku gets an emergency once a year or borrows in small chunks of 500to 7500= pa, what is the annualised rate? If you annualize the 7500 p.m repaymets, the principal amount works to aprox 61K. @swenani.Could you please work out for me how much interest I will pay at the end of the year if I have to borrow kshs 7500.00 each and every month. Whatever you are trying to explain is not conciding with the actual situation on the ground. What I outlined above is the very simple basic and authentic situation and not theory..Have a look again and let us have your own calculations to disagree with mine. Quote:@guru267...wewe ulisomea hesabu wapi?
Let us look at your fallacy...
In September 2016 @newfarer takes a loan of kshs 7500 and pays kshs 293.25 being interest totalling kshs 7500.00 in payment after one month..
in October 2016 he will take another loan of kshs 7206.75 and pay kshs 293.25 in interest again totaling kshs 7500.00 in payment after another month.
In November 2016 another one of kshs 7206.75 at kshs 293.25 as interest.
Assuming that @newfarer will be taking a loan on a monthly basis, after one year @newfarer will have borrowed kshs 7206.75 x 12 = kshs 86,481.00 and the total interest will be kshs 293.25 x 12 = kshs 3519.00 for the year.
therefore average interest rate for newfarer alone on money borrowed in one year will be (3519/86,481) x 100% = 4.069%
Let me also remove that false reasoning that people are peddling here about mshwari loans at 7.5% per month interest adds to 90% per year...this is total rubbish!!! Why?
I borrow kshs 6000.00 at 7.5% interest or kshs 450.00 after one month.
In one year, I will have borrowed a total of kshs 6000.00 x 12 = 72,000.00 and the total interest will be kshs 450.00 x 12 = kshs 5400.00.
Average interest rate that has been charged on all the moneys borrowed within the year is (5400/72,000) x 100% = 7.5% for the year.
Actually in both the cases Wanjiku is benefitting immensely, only that KCB Mpesa is lower in interest. The math is correct if he borrows 7,500 and repays 7,500 every month. At no time will you have the lumpsum amount together so the calculation is not right. Essentially, some of the money loaned in subsequent months includes the interest paid while servicing earlier loans. With the monthly loan of 6K you will have paid 4950 in the 11th month which means the bank will just add 1050 in the 12th month to give you 6K. Truth forever on the scaffold
Wrong forever on the throne
(James Russell Rowell)
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Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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kaka2za wrote:sparkly wrote:Kaigangio wrote:Swenani wrote:newfarer wrote:48% still better than 90% by mshwari, remember these loans are mostly for emergencies and there is a likelihood of not taking it on a monthly basis. The point is Wanjiku was to be locked out of credit facilities because she is too risky but this has not happened. People are really waiting to say' I told you '
If Wanjiku gets an emergency once a year or borrows in small chunks of 500to 7500= pa, what is the annualised rate? If you annualize the 7500 p.m repaymets, the principal amount works to aprox 61K. @swenani.Could you please work out for me how much interest I will pay at the end of the year if I have to borrow kshs 7500.00 each and every month. Whatever you are trying to explain is not conciding with the actual situation on the ground. What I outlined above is the very simple basic and authentic situation and not theory..Have a look again and let us have your own calculations to disagree with mine. Quote:@guru267...wewe ulisomea hesabu wapi?
Let us look at your fallacy...
In September 2016 @newfarer takes a loan of kshs 7500 and pays kshs 293.25 being interest totalling kshs 7500.00 in payment after one month..
in October 2016 he will take another loan of kshs 7206.75 and pay kshs 293.25 in interest again totaling kshs 7500.00 in payment after another month.
In November 2016 another one of kshs 7206.75 at kshs 293.25 as interest.
Assuming that @newfarer will be taking a loan on a monthly basis, after one year @newfarer will have borrowed kshs 7206.75 x 12 = kshs 86,481.00 and the total interest will be kshs 293.25 x 12 = kshs 3519.00 for the year.
therefore average interest rate for newfarer alone on money borrowed in one year will be (3519/86,481) x 100% = 4.069%
Let me also remove that false reasoning that people are peddling here about mshwari loans at 7.5% per month interest adds to 90% per year...this is total rubbish!!! Why?
I borrow kshs 6000.00 at 7.5% interest or kshs 450.00 after one month.
In one year, I will have borrowed a total of kshs 6000.00 x 12 = 72,000.00 and the total interest will be kshs 450.00 x 12 = kshs 5400.00.
Average interest rate that has been charged on all the moneys borrowed within the year is (5400/72,000) x 100% = 7.5% for the year.
Actually in both the cases Wanjiku is benefitting immensely, only that KCB Mpesa is lower in interest. The math is correct if he borrows 7,500 and repays 7,500 every month. At no time will you have the lumpsum amount together so the calculation is not right. Essentially, some of the money loaned in subsequent months includes the interest paid while servicing earlier loans. With the monthly loan of 6K you will have paid 4950 in the 11th month which means the bank will just add 1050 in the 12th month to give you 6K. Fact is , if yo are of the view that the bank gave you a gross loan of 7500 per year, you end up paying about 3500 in interest But if you also believe that you got 90K per year if you borrowed and repaid 7500 pm, your effective principal is around 61K. Whichever the case, you annual interest is 48% If Obiero did it, Who Am I?
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Rank: Elder Joined: 10/3/2008 Posts: 4,057 Location: Gwitu
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Swenani wrote:kaka2za wrote:sparkly wrote:Kaigangio wrote:Swenani wrote:newfarer wrote:48% still better than 90% by mshwari, remember these loans are mostly for emergencies and there is a likelihood of not taking it on a monthly basis. The point is Wanjiku was to be locked out of credit facilities because she is too risky but this has not happened. People are really waiting to say' I told you '
If Wanjiku gets an emergency once a year or borrows in small chunks of 500to 7500= pa, what is the annualised rate? If you annualize the 7500 p.m repaymets, the principal amount works to aprox 61K. @swenani.Could you please work out for me how much interest I will pay at the end of the year if I have to borrow kshs 7500.00 each and every month. Whatever you are trying to explain is not conciding with the actual situation on the ground. What I outlined above is the very simple basic and authentic situation and not theory..Have a look again and let us have your own calculations to disagree with mine. Quote:@guru267...wewe ulisomea hesabu wapi?
Let us look at your fallacy...
In September 2016 @newfarer takes a loan of kshs 7500 and pays kshs 293.25 being interest totalling kshs 7500.00 in payment after one month..
in October 2016 he will take another loan of kshs 7206.75 and pay kshs 293.25 in interest again totaling kshs 7500.00 in payment after another month.
In November 2016 another one of kshs 7206.75 at kshs 293.25 as interest.
Assuming that @newfarer will be taking a loan on a monthly basis, after one year @newfarer will have borrowed kshs 7206.75 x 12 = kshs 86,481.00 and the total interest will be kshs 293.25 x 12 = kshs 3519.00 for the year.
therefore average interest rate for newfarer alone on money borrowed in one year will be (3519/86,481) x 100% = 4.069%
Let me also remove that false reasoning that people are peddling here about mshwari loans at 7.5% per month interest adds to 90% per year...this is total rubbish!!! Why?
I borrow kshs 6000.00 at 7.5% interest or kshs 450.00 after one month.
In one year, I will have borrowed a total of kshs 6000.00 x 12 = 72,000.00 and the total interest will be kshs 450.00 x 12 = kshs 5400.00.
Average interest rate that has been charged on all the moneys borrowed within the year is (5400/72,000) x 100% = 7.5% for the year.
Actually in both the cases Wanjiku is benefitting immensely, only that KCB Mpesa is lower in interest. The math is correct if he borrows 7,500 and repays 7,500 every month. At no time will you have the lumpsum amount together so the calculation is not right. Essentially, some of the money loaned in subsequent months includes the interest paid while servicing earlier loans. With the monthly loan of 6K you will have paid 4950 in the 11th month which means the bank will just add 1050 in the 12th month to give you 6K. Fact is , if yo are of the view that the bank gave you a gross loan of 7500 per year, you end up paying about 3500 in interest But if you also believe that you got 90K per year if you borrowed and repaid 7500 pm, your effective principal is around 61K. Whichever the case, you annual interest is 48% True. Being given 6000 per month for 12 months to repay on monthly basis is not the same as being given 72000 to pay in 12 months. Truth forever on the scaffold
Wrong forever on the throne
(James Russell Rowell)
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Rank: Elder Joined: 2/27/2007 Posts: 2,768
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Swenani wrote:kaka2za wrote:sparkly wrote:Kaigangio wrote:Swenani wrote:newfarer wrote:48% still better than 90% by mshwari, remember these loans are mostly for emergencies and there is a likelihood of not taking it on a monthly basis. The point is Wanjiku was to be locked out of credit facilities because she is too risky but this has not happened. People are really waiting to say' I told you '
If Wanjiku gets an emergency once a year or borrows in small chunks of 500to 7500= pa, what is the annualised rate? If you annualize the 7500 p.m repaymets, the principal amount works to aprox 61K. @swenani.Could you please work out for me how much interest I will pay at the end of the year if I have to borrow kshs 7500.00 each and every month. Whatever you are trying to explain is not conciding with the actual situation on the ground. What I outlined above is the very simple basic and authentic situation and not theory..Have a look again and let us have your own calculations to disagree with mine. Quote:@guru267...wewe ulisomea hesabu wapi?
Let us look at your fallacy...
In September 2016 @newfarer takes a loan of kshs 7500 and pays kshs 293.25 being interest totalling kshs 7500.00 in payment after one month..
in October 2016 he will take another loan of kshs 7206.75 and pay kshs 293.25 in interest again totaling kshs 7500.00 in payment after another month.
In November 2016 another one of kshs 7206.75 at kshs 293.25 as interest.
Assuming that @newfarer will be taking a loan on a monthly basis, after one year @newfarer will have borrowed kshs 7206.75 x 12 = kshs 86,481.00 and the total interest will be kshs 293.25 x 12 = kshs 3519.00 for the year.
therefore average interest rate for newfarer alone on money borrowed in one year will be (3519/86,481) x 100% = 4.069%
Let me also remove that false reasoning that people are peddling here about mshwari loans at 7.5% per month interest adds to 90% per year...this is total rubbish!!! Why?
I borrow kshs 6000.00 at 7.5% interest or kshs 450.00 after one month.
In one year, I will have borrowed a total of kshs 6000.00 x 12 = 72,000.00 and the total interest will be kshs 450.00 x 12 = kshs 5400.00.
Average interest rate that has been charged on all the moneys borrowed within the year is (5400/72,000) x 100% = 7.5% for the year.
Actually in both the cases Wanjiku is benefitting immensely, only that KCB Mpesa is lower in interest. The math is correct if he borrows 7,500 and repays 7,500 every month. At no time will you have the lumpsum amount together so the calculation is not right. Essentially, some of the money loaned in subsequent months includes the interest paid while servicing earlier loans. With the monthly loan of 6K you will have paid 4950 in the 11th month which means the bank will just add 1050 in the 12th month to give you 6K. Fact is , if yo are of the view that the bank gave you a gross loan of 7500 per year, you end up paying about 3500 in interest But if you also believe that you got 90K per year if you borrowed and repaid 7500 pm, your effective principal is around 61K. Whichever the case, you annual interest is 48% @swenani...you are wrong again... we are not talking about perception or hypothesis here. Let us be realistic or practical. I already showed you that if I borrowed kshs 7500.00 like most of us are doing now and will do, if the same conditions hold for the the next one year, the upper limit of the average interest rate of my borrowings will be 4.069% in one year or at the end of the year for KCB Mpesa. Note here that I am only dealing and talking about the Money that I am receiving and not money which I have not received. I still insist that you do for me a step by step calculations on my total loans build up on a monthly base for one year and show me how after 12 monthly borrowings of kshs 7500.00 per borrowing, I will pay an interest equivalent to 48%. Just that. Anything else before this is gas. ...besides, the presence of a safe alone does not signify that there is money inside...
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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Kaigangio wrote:Swenani wrote:kaka2za wrote:sparkly wrote:Kaigangio wrote:Swenani wrote:newfarer wrote:48% still better than 90% by mshwari, remember these loans are mostly for emergencies and there is a likelihood of not taking it on a monthly basis. The point is Wanjiku was to be locked out of credit facilities because she is too risky but this has not happened. People are really waiting to say' I told you '
If Wanjiku gets an emergency once a year or borrows in small chunks of 500to 7500= pa, what is the annualised rate? If you annualize the 7500 p.m repaymets, the principal amount works to aprox 61K. @swenani.Could you please work out for me how much interest I will pay at the end of the year if I have to borrow kshs 7500.00 each and every month. Whatever you are trying to explain is not conciding with the actual situation on the ground. What I outlined above is the very simple basic and authentic situation and not theory..Have a look again and let us have your own calculations to disagree with mine. Quote:@guru267...wewe ulisomea hesabu wapi?
Let us look at your fallacy...
In September 2016 @newfarer takes a loan of kshs 7500 and pays kshs 293.25 being interest totalling kshs 7500.00 in payment after one month..
in October 2016 he will take another loan of kshs 7206.75 and pay kshs 293.25 in interest again totaling kshs 7500.00 in payment after another month.
In November 2016 another one of kshs 7206.75 at kshs 293.25 as interest.
Assuming that @newfarer will be taking a loan on a monthly basis, after one year @newfarer will have borrowed kshs 7206.75 x 12 = kshs 86,481.00 and the total interest will be kshs 293.25 x 12 = kshs 3519.00 for the year.
therefore average interest rate for newfarer alone on money borrowed in one year will be (3519/86,481) x 100% = 4.069%
Let me also remove that false reasoning that people are peddling here about mshwari loans at 7.5% per month interest adds to 90% per year...this is total rubbish!!! Why?
I borrow kshs 6000.00 at 7.5% interest or kshs 450.00 after one month.
In one year, I will have borrowed a total of kshs 6000.00 x 12 = 72,000.00 and the total interest will be kshs 450.00 x 12 = kshs 5400.00.
Average interest rate that has been charged on all the moneys borrowed within the year is (5400/72,000) x 100% = 7.5% for the year.
Actually in both the cases Wanjiku is benefitting immensely, only that KCB Mpesa is lower in interest. The math is correct if he borrows 7,500 and repays 7,500 every month. At no time will you have the lumpsum amount together so the calculation is not right. Essentially, some of the money loaned in subsequent months includes the interest paid while servicing earlier loans. With the monthly loan of 6K you will have paid 4950 in the 11th month which means the bank will just add 1050 in the 12th month to give you 6K. Fact is , if yo are of the view that the bank gave you a gross loan of 7500 per year, you end up paying about 3500 in interest But if you also believe that you got 90K per year if you borrowed and repaid 7500 pm, your effective principal is around 61K. Whichever the case, you annual interest is 48% @swenani...you are wrong again... we are not talking about perception or hypothesis here. Let us be realistic or practical. I already showed you that if I borrowed kshs 7500.00 like most of us are doing now and will do, if the same conditions hold for the the next one year, the upper limit of the average interest rate of my borrowings will be 4.069% in one year or at the end of the year for KCB Mpesa. Note here that I am only dealing and talking about the Money that I am receiving and not money which I have not received. I still insist that you do for me a step by step calculations on my total loans build up on a monthly base for one year and show me how after 12 monthly borrowings of kshs 7500.00 per borrowing, I will pay an interest equivalent to 48%. Just that. Anything else before this is gas. You mean fart or pumzi. 
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Rank: Veteran Joined: 8/28/2015 Posts: 1,247
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enyands wrote:Kaigangio wrote:Swenani wrote:kaka2za wrote:sparkly wrote:Kaigangio wrote:Swenani wrote:newfarer wrote:48% still better than 90% by mshwari, remember these loans are mostly for emergencies and there is a likelihood of not taking it on a monthly basis. The point is Wanjiku was to be locked out of credit facilities because she is too risky but this has not happened. People are really waiting to say' I told you '
If Wanjiku gets an emergency once a year or borrows in small chunks of 500to 7500= pa, what is the annualised rate? If you annualize the 7500 p.m repaymets, the principal amount works to aprox 61K. @swenani.Could you please work out for me how much interest I will pay at the end of the year if I have to borrow kshs 7500.00 each and every month. Whatever you are trying to explain is not conciding with the actual situation on the ground. What I outlined above is the very simple basic and authentic situation and not theory..Have a look again and let us have your own calculations to disagree with mine. Quote:@guru267...wewe ulisomea hesabu wapi?
Let us look at your fallacy...
In September 2016 @newfarer takes a loan of kshs 7500 and pays kshs 293.25 being interest totalling kshs 7500.00 in payment after one month..
in October 2016 he will take another loan of kshs 7206.75 and pay kshs 293.25 in interest again totaling kshs 7500.00 in payment after another month.
In November 2016 another one of kshs 7206.75 at kshs 293.25 as interest.
Assuming that @newfarer will be taking a loan on a monthly basis, after one year @newfarer will have borrowed kshs 7206.75 x 12 = kshs 86,481.00 and the total interest will be kshs 293.25 x 12 = kshs 3519.00 for the year.
therefore average interest rate for newfarer alone on money borrowed in one year will be (3519/86,481) x 100% = 4.069%
Let me also remove that false reasoning that people are peddling here about mshwari loans at 7.5% per month interest adds to 90% per year...this is total rubbish!!! Why?
I borrow kshs 6000.00 at 7.5% interest or kshs 450.00 after one month.
In one year, I will have borrowed a total of kshs 6000.00 x 12 = 72,000.00 and the total interest will be kshs 450.00 x 12 = kshs 5400.00.
Average interest rate that has been charged on all the moneys borrowed within the year is (5400/72,000) x 100% = 7.5% for the year.
Actually in both the cases Wanjiku is benefitting immensely, only that KCB Mpesa is lower in interest. The math is correct if he borrows 7,500 and repays 7,500 every month. At no time will you have the lumpsum amount together so the calculation is not right. Essentially, some of the money loaned in subsequent months includes the interest paid while servicing earlier loans. With the monthly loan of 6K you will have paid 4950 in the 11th month which means the bank will just add 1050 in the 12th month to give you 6K. Fact is , if yo are of the view that the bank gave you a gross loan of 7500 per year, you end up paying about 3500 in interest But if you also believe that you got 90K per year if you borrowed and repaid 7500 pm, your effective principal is around 61K. Whichever the case, you annual interest is 48% @swenani...you are wrong again... we are not talking about perception or hypothesis here. Let us be realistic or practical. I already showed you that if I borrowed kshs 7500.00 like most of us are doing now and will do, if the same conditions hold for the the next one year, the upper limit of the average interest rate of my borrowings will be 4.069% in one year or at the end of the year for KCB Mpesa. Note here that I am only dealing and talking about the Money that I am receiving and not money which I have not received. I still insist that you do for me a step by step calculations on my total loans build up on a monthly base for one year and show me how after 12 monthly borrowings of kshs 7500.00 per borrowing, I will pay an interest equivalent to 48%. Just that. Anything else before this is gas. You mean fart or pumzi. yes farting green bucks all the way to the kuitels cash fix box. smelling moni or mandazi, ,Behold, a sower went forth to sow;....
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Rank: Elder Joined: 7/22/2009 Posts: 7,460
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Kaigangio wrote:Swenani wrote:newfarer wrote:48% still better than 90% by mshwari, remember these loans are mostly for emergencies and there is a likelihood of not taking it on a monthly basis. The point is Wanjiku was to be locked out of credit facilities because she is too risky but this has not happened. People are really waiting to say' I told you '
If Wanjiku gets an emergency once a year or borrows in small chunks of 500to 7500= pa, what is the annualised rate? If you annualize the 7500 p.m repaymets, the principal amount works to aprox 61K. @swenani.Could you please work out for me how much interest I will pay at the end of the year if I have to borrow kshs 7500.00 each and every month. Whatever you are trying to explain is not conciding with the actual situation on the ground. What I outlined above is the very simple basic and authentic situation and not theory..Have a look again and let us have your own calculations to disagree with mine. Quote:@guru267...wewe ulisomea hesabu wapi?
Let us look at your fallacy...
In September 2016 @newfarer takes a loan of kshs 7500 and pays kshs 293.25 being interest totalling kshs 7500.00 in payment after one month..
in October 2016 he will take another loan of kshs 7206.75 and pay kshs 293.25 in interest again totaling kshs 7500.00 in payment after another month.
In November 2016 another one of kshs 7206.75 at kshs 293.25 as interest.
Assuming that @newfarer will be taking a loan on a monthly basis, after one year @newfarer will have borrowed kshs 7206.75 x 12 = kshs 86,481.00 and the total interest will be kshs 293.25 x 12 = kshs 3519.00 for the year.
therefore average interest rate for newfarer alone on money borrowed in one year will be (3519/86,481) x 100% = 4.069%
Let me also remove that false reasoning that people are peddling here about mshwari loans at 7.5% per month interest adds to 90% per year...this is total rubbish!!! Why?
I borrow kshs 6000.00 at 7.5% interest or kshs 450.00 after one month.
In one year, I will have borrowed a total of kshs 6000.00 x 12 = 72,000.00 and the total interest will be kshs 450.00 x 12 = kshs 5400.00.
Average interest rate that has been charged on all the moneys borrowed within the year is (5400/72,000) x 100% = 7.5% for the year.
Actually in both the cases Wanjiku is benefitting immensely, only that KCB Mpesa is lower in interest. @Kaigangio - You are terrible in maths and logic!!! You borrow 7500/= pay back the 7500/= and borrow it back and you are multiplying by 12??? Let me make this as simple for you as I can. Borrow 7,500/= and don't spend it on anything. pay back the 7,500/= from the "kitty" and borrow 7,500/= more to add to the kitty. Repeat this for 12 months and see if you will be having 7,500/= or 90,000/= (7,500/= × 12) at the end of the year. While at it, give that calculation to 5 average class 4 pupils and see if any of them will come up with the miraculous answer of 90,000/= 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: 7/22/2009 Posts: 7,460
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Swenani wrote:hardwood wrote:Nope. At the end of the year wanjiku would have paid about 3500 for a loan of 86450, that is if she takes a loan each month. Ulisomea compounding kwa dirisha? Try to annualize the loan adn the interest. Wanjiku has not borrowed 7500*12=90,000 but has only borrowed 7,500 annually and paid an interest of 3500 annually Our education system must have failed very many people!!! Imagine these are wazuans coming up with these calculations!!! #Speechless!!! 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: 7/22/2009 Posts: 7,460
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Kaigangio wrote:Swenani wrote:kaka2za wrote:sparkly wrote:Kaigangio wrote:Swenani wrote:newfarer wrote:48% still better than 90% by mshwari, remember these loans are mostly for emergencies and there is a likelihood of not taking it on a monthly basis. The point is Wanjiku was to be locked out of credit facilities because she is too risky but this has not happened. People are really waiting to say' I told you '
If Wanjiku gets an emergency once a year or borrows in small chunks of 500to 7500= pa, what is the annualised rate? If you annualize the 7500 p.m repaymets, the principal amount works to aprox 61K. @swenani.Could you please work out for me how much interest I will pay at the end of the year if I have to borrow kshs 7500.00 each and every month. Whatever you are trying to explain is not conciding with the actual situation on the ground. What I outlined above is the very simple basic and authentic situation and not theory..Have a look again and let us have your own calculations to disagree with mine. Quote:@guru267...wewe ulisomea hesabu wapi?
Let us look at your fallacy...
In September 2016 @newfarer takes a loan of kshs 7500 and pays kshs 293.25 being interest totalling kshs 7500.00 in payment after one month..
in October 2016 he will take another loan of kshs 7206.75 and pay kshs 293.25 in interest again totaling kshs 7500.00 in payment after another month.
In November 2016 another one of kshs 7206.75 at kshs 293.25 as interest.
Assuming that @newfarer will be taking a loan on a monthly basis, after one year @newfarer will have borrowed kshs 7206.75 x 12 = kshs 86,481.00 and the total interest will be kshs 293.25 x 12 = kshs 3519.00 for the year.
therefore average interest rate for newfarer alone on money borrowed in one year will be (3519/86,481) x 100% = 4.069%
Let me also remove that false reasoning that people are peddling here about mshwari loans at 7.5% per month interest adds to 90% per year...this is total rubbish!!! Why?
I borrow kshs 6000.00 at 7.5% interest or kshs 450.00 after one month.
In one year, I will have borrowed a total of kshs 6000.00 x 12 = 72,000.00 and the total interest will be kshs 450.00 x 12 = kshs 5400.00.
Average interest rate that has been charged on all the moneys borrowed within the year is (5400/72,000) x 100% = 7.5% for the year.
Actually in both the cases Wanjiku is benefitting immensely, only that KCB Mpesa is lower in interest. The math is correct if he borrows 7,500 and repays 7,500 every month. At no time will you have the lumpsum amount together so the calculation is not right. Essentially, some of the money loaned in subsequent months includes the interest paid while servicing earlier loans. With the monthly loan of 6K you will have paid 4950 in the 11th month which means the bank will just add 1050 in the 12th month to give you 6K. Fact is , if yo are of the view that the bank gave you a gross loan of 7500 per year, you end up paying about 3500 in interest But if you also believe that you got 90K per year if you borrowed and repaid 7500 pm, your effective principal is around 61K. Whichever the case, you annual interest is 48% @swenani...you are wrong again... we are not talking about perception or hypothesis here. Let us be realistic or practical. I already showed you that if I borrowed kshs 7500.00 like most of us are doing now and will do, if the same conditions hold for the the next one year, the upper limit of the average interest rate of my borrowings will be 4.069% in one year or at the end of the year for KCB Mpesa. Note here that I am only dealing and talking about the Money that I am receiving and not money which I have not received.
I still insist that you do for me a step by step calculations on my total loans build up on a monthly base for one year and show me how after 12 monthly borrowings of kshs 7500.00 per borrowing, I will pay an interest equivalent to 48%. Just that. Anything else before this is gas. @Kaigangio!!! Seriously!!! In your calculations, you keep adding 7,500/= but you are not subtracting!!! If you get 7,500/= every month WITHOUT RETURNING any of it, then you would have 90,000/=. BUT if you borrow 7,500/= and return it then borrow it back, then you have ONLY 7,500/= even if you repeat it 12 times!!! It is like moving money from your left pocket to the right one every 30 days and then returning it to the left pocket after a few hours. And in so doing, you are imagining you will magically end up with 90,000/=. You will not! You will have only 7,500/= come the end of the year!!! And you still pay a ACTUAL interest of 3,600/= (or thereabouts) for the 7,500/= by the end of the year!!! 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: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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 If Obiero did it, Who Am I?
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Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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Kaigangio wrote:Swenani wrote:kaka2za wrote:sparkly wrote:Kaigangio wrote:Swenani wrote:newfarer wrote:48% still better than 90% by mshwari, remember these loans are mostly for emergencies and there is a likelihood of not taking it on a monthly basis. The point is Wanjiku was to be locked out of credit facilities because she is too risky but this has not happened. People are really waiting to say' I told you '
If Wanjiku gets an emergency once a year or borrows in small chunks of 500to 7500= pa, what is the annualised rate? If you annualize the 7500 p.m repaymets, the principal amount works to aprox 61K. @swenani.Could you please work out for me how much interest I will pay at the end of the year if I have to borrow kshs 7500.00 each and every month. Whatever you are trying to explain is not conciding with the actual situation on the ground. What I outlined above is the very simple basic and authentic situation and not theory..Have a look again and let us have your own calculations to disagree with mine. Quote:@guru267...wewe ulisomea hesabu wapi?
Let us look at your fallacy...
In September 2016 @newfarer takes a loan of kshs 7500 and pays kshs 293.25 being interest totalling kshs 7500.00 in payment after one month..
in October 2016 he will take another loan of kshs 7206.75 and pay kshs 293.25 in interest again totaling kshs 7500.00 in payment after another month.
In November 2016 another one of kshs 7206.75 at kshs 293.25 as interest.
Assuming that @newfarer will be taking a loan on a monthly basis, after one year @newfarer will have borrowed kshs 7206.75 x 12 = kshs 86,481.00 and the total interest will be kshs 293.25 x 12 = kshs 3519.00 for the year.
therefore average interest rate for newfarer alone on money borrowed in one year will be (3519/86,481) x 100% = 4.069%
Let me also remove that false reasoning that people are peddling here about mshwari loans at 7.5% per month interest adds to 90% per year...this is total rubbish!!! Why?
I borrow kshs 6000.00 at 7.5% interest or kshs 450.00 after one month.
In one year, I will have borrowed a total of kshs 6000.00 x 12 = 72,000.00 and the total interest will be kshs 450.00 x 12 = kshs 5400.00.
Average interest rate that has been charged on all the moneys borrowed within the year is (5400/72,000) x 100% = 7.5% for the year.
Actually in both the cases Wanjiku is benefitting immensely, only that KCB Mpesa is lower in interest. The math is correct if he borrows 7,500 and repays 7,500 every month. At no time will you have the lumpsum amount together so the calculation is not right. Essentially, some of the money loaned in subsequent months includes the interest paid while servicing earlier loans. With the monthly loan of 6K you will have paid 4950 in the 11th month which means the bank will just add 1050 in the 12th month to give you 6K. Fact is , if yo are of the view that the bank gave you a gross loan of 7500 per year, you end up paying about 3500 in interest But if you also believe that you got 90K per year if you borrowed and repaid 7500 pm, your effective principal is around 61K. Whichever the case, you annual interest is 48% @swenani...you are wrong again... we are not talking about perception or hypothesis here. Let us be realistic or practical. I already showed you that if I borrowed kshs 7500.00 like most of us are doing now and will do, if the same conditions hold for the the next one year, the upper limit of the average interest rate of my borrowings will be 4.069% in one year or at the end of the year for KCB Mpesa. Note here that I am only dealing and talking about the Money that I am receiving and not money which I have not received. I still insist that you do for me a step by step calculations on my total loans build up on a monthly base for one year and show me how after 12 monthly borrowings of kshs 7500.00 per borrowing, I will pay an interest equivalent to 48%. Just that. Anything else before this is gas. You have too much gas in your head @Kaigangio! If you want me to show you how your annual interest rate is not 4%, my charge out rate is $70 If Obiero did it, Who Am I?
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