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Law Capping interest rates
Rank: Elder Joined: 6/23/2009 Posts: 14,224 Location: nairobi
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Rank: Elder Joined: 6/23/2009 Posts: 14,224 Location: nairobi
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Rank: Member Joined: 4/14/2010 Posts: 806 Location: Nairobi
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[quote=obiero]Sidian down http://www.businessdaily...7684-h6y6c2z/index.html[/quote] @obiero...only banks that have interest rate cap proof mechanisms will escape the heat...eg memba with equitel, simba with kcb mpesa loans
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Rank: Veteran Joined: 7/5/2010 Posts: 2,061 Location: Nairobi
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It would be careless of bank chiefs to keep hoping the rate cap will go away and stop adjusting appropriately. It might go away in the near future,....but there is a reason why the cap came into existence. At the very least, it looks good for politicians to thwack banks with a big club -so if it goes away, and banksters don't take some hard lessons from the experience and address real concerns about the cost of credit to Wanjiku, it could come back. And this back and forth in policy isn't good for anyone. Also, the rate cap might not go away.
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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Even if the rate cap goes away, why will retail credit expand? Most loans are in arrears at 14%, what will happen if banks adjust upwards to 18%? It's the economy, stupid.... Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 6/23/2009 Posts: 14,224 Location: nairobi
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KulaRaha wrote:Even if the rate cap goes away, why will retail credit expand? Most loans are in arrears at 14%, what will happen if banks adjust upwards to 18%?
It's the economy, stupid.... Asante @kularaha.. Some people simply don't get it. BBK needs to adjust it's whole model
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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obiero wrote:KulaRaha wrote:Even if the rate cap goes away, why will retail credit expand? Most loans are in arrears at 14%, what will happen if banks adjust upwards to 18%?
It's the economy, stupid.... Asante @kularaha.. Some people simply don't get it. BBK needs to adjust it's whole model Even at 18%, I doubt banks would risk more lending with npls where they are now...its better to get a lower return from GoK paper than chase a defaulter... Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 12/4/2009 Posts: 10,808 Location: NAIROBI
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Job stability should be the number one priority.Then all the other things will fall into place like credit expansion Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Veteran Joined: 10/29/2008 Posts: 1,566
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KulaRaha wrote:Even if the rate cap goes away, why will retail credit expand? Most loans are in arrears at 14%, what will happen if banks adjust upwards to 18%?
It's the economy, stupid....  So said Bill Clinton, then he went on to win the election. Isuni yilu yi maa me muyo - ni Mbisuu
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Rank: Veteran Joined: 10/29/2008 Posts: 1,566
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quicksand wrote:It would be careless of bank chiefs to keep hoping the rate cap will go away and stop adjusting appropriately. It might go away in the near future,....but there is a reason why the cap came into existence. At the very least, it looks good for politicians to thwack banks with a big club -so if it goes away, and banksters don't take some hard lessons from the experience and address real concerns about the cost of credit to Wanjiku, it could come back. And this back and forth in policy isn't good for anyone. Also, the rate cap might not go away. Bear one thing in mind 'Organisms dont commit suicide' - knowingly. Sidian Bank couldnt have allowed themselves go into loss territory just to prove a point. Isuni yilu yi maa me muyo - ni Mbisuu
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Law Capping interest rates
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