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Law Capping interest rates
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Ericsson
#2031 Posted : Tuesday, June 06, 2017 11:38:01 AM
Rank: Elder

Joined: 12/4/2009
Posts: 10,809
Location: NAIROBI
The law should have been made to be deposit at 70% of the CBK rate and loans given at a maximum of 70% above the CBK rate.
This would have given lifeline to the small banks and credit to SMEs
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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obiero
#2032 Posted : Tuesday, June 06, 2017 9:46:21 PM
Rank: Elder

Joined: 6/23/2009
Posts: 14,232
Location: nairobi
Ericsson wrote:
The law should have been made to be deposit at 70% of the CBK rate and loans given at a maximum of 70% above the CBK rate.
This would have given lifeline to the small banks and credit to SMEs

@Ericsson that would be higher than the former KBRR rule
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Ericsson
#2033 Posted : Tuesday, June 06, 2017 10:52:57 PM
Rank: Elder

Joined: 12/4/2009
Posts: 10,809
Location: NAIROBI
obiero wrote:
Ericsson wrote:
The law should have been made to be deposit at 70% of the CBK rate and loans given at a maximum of 70% above the CBK rate.
This would have given lifeline to the small banks and credit to SMEs

@Ericsson that would be higher than the former KBRR rule


Not really;
That would mean at the current rates the maximum interest rates bank would offer a loan will be 17% instead of the current 14%
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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obiero
#2034 Posted : Wednesday, June 07, 2017 7:14:31 AM
Rank: Elder

Joined: 6/23/2009
Posts: 14,232
Location: nairobi
Ericsson wrote:
obiero wrote:
Ericsson wrote:
The law should have been made to be deposit at 70% of the CBK rate and loans given at a maximum of 70% above the CBK rate.
This would have given lifeline to the small banks and credit to SMEs

@Ericsson that would be higher than the former KBRR rule


Not really;
That would mean at the current rates the maximum interest rates bank would offer a loan will be 17% instead of the current 14%

Exactly, while KBRR was 14% plus a K that was determined independently by each bank.. The capping is a game changer that will obviously hurt a few banks and many workers but in my view we should aim for single digit interest regime as happens in most developed economies, backed by a solid credit scoring system

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Ericsson
#2035 Posted : Wednesday, June 07, 2017 8:28:47 AM
Rank: Elder

Joined: 12/4/2009
Posts: 10,809
Location: NAIROBI
@Obiero
With the corruption,inflation,mismanagement of the economy,huge government borrowing,budget deficit,import-export gap single digit interest rates is a hard nut to crack.
We need to fix the mentioned items and single digit interest rates will come automatically
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Wakanyugi
#2036 Posted : Wednesday, June 07, 2017 8:47:52 AM
Rank: Veteran

Joined: 7/3/2007
Posts: 1,635
Obi 1 Kanobi wrote:
The reality of the interest rates caps is finally coming out. According to CBK latest data, rates cap will be good for the economy in the medium term.

Check out the latest East African paper. Can't find link online though.

Equity is also reverting to robust lending

The sky is falling brigade please read and calm down, the cap stays on.


Memo to: 'The Sky is Falling Department"

Here you go: Numbers don't lie

You are welcome smile smile smile
"The opposite of a correct statement is a false statement. But the opposite of a profound truth may well be another profound truth." (Niels Bohr)
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wukan
#2037 Posted : Wednesday, June 07, 2017 9:54:23 AM
Rank: Veteran

Joined: 11/13/2015
Posts: 1,654
Wakanyugi wrote:
Obi 1 Kanobi wrote:
The reality of the interest rates caps is finally coming out. According to CBK latest data, rates cap will be good for the economy in the medium term.

Check out the latest East African paper. Can't find link online though.

Equity is also reverting to robust lending

The sky is falling brigade please read and calm down, the cap stays on.


Memo to: 'The Sky is Falling Department"

Here you go: Numbers don't lie

You are welcome smile smile smile


Have you looked at the M1 money supply statistics from 2016 to now? If you did you will like me Laughing out loudly Laughing out loudly all the way to the bank.
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wukan
#2038 Posted : Wednesday, June 07, 2017 10:06:06 AM
Rank: Veteran

Joined: 11/13/2015
Posts: 1,654
obiero wrote:
Ericsson wrote:
obiero wrote:
Ericsson wrote:
The law should have been made to be deposit at 70% of the CBK rate and loans given at a maximum of 70% above the CBK rate.
This would have given lifeline to the small banks and credit to SMEs

@Ericsson that would be higher than the former KBRR rule


Not really;
That would mean at the current rates the maximum interest rates bank would offer a loan will be 17% instead of the current 14%

Exactly, while KBRR was 14% plus a K that was determined independently by each bank.. The capping is a game changer that will obviously hurt a few banks and many workers but in my view we should aim for single digit interest regime as happens in most developed economies, backed by a solid credit scoring system


Whose interest do you protect as a banker? That of the shareholder who gives the capital, the depositor who wants you to return his money intact or that of the borrower who wants you to finance his fancy projects? If you want the single digit interest rates where is that capital that you will lend at this rate? What is the savings rate in Kenya?
Do people with good credit scores usually need risky loans
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obiero
#2039 Posted : Wednesday, June 07, 2017 10:12:14 AM
Rank: Elder

Joined: 6/23/2009
Posts: 14,232
Location: nairobi
Ericsson wrote:
@Obiero
With the corruption,inflation,mismanagement of the economy,huge government borrowing,budget deficit,import-export gap single digit interest rates is a hard nut to crack.
We need to fix the mentioned items and single digit interest rates will come automatically

I agree. The system is broken.. Here is proof http://mobile.nation.co....958792-yxh9g5/index.html
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maka
#2040 Posted : Saturday, June 10, 2017 10:53:24 AM
Rank: Elder

Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
Just noticed that NIC have been crediting interest every end month on my savings account smile Nice. I think kitambo the amounts were to negligible to notice...
possunt quia posse videntur
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303 Pages«<202203204205206>»
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