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Law Capping interest rates
Rank: Veteran Joined: 11/13/2015 Posts: 1,654
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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.... You need to let the market work (willing lender/willing borrower). Efficient allocation of resources is best left to the market not to some committee of bureaucrats and pensioners. Creative destruction needs to happen in the economy. Bad businesses that can't afford to pay at market rate should just die because they are wasting resources. New businesses need that capital to thrive should get it. The economy should not suffer because of zombies. There are many young people who may never find a decent job in their prime years because we are busy propping up zombies like mumias, uchumi. Insolvency laws should deal with those who can't adjust to 18%
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Rank: Member Joined: 2/20/2007 Posts: 767
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wukan 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.... You need to let the market work (willing lender/willing borrower). Efficient allocation of resources is best left to the market not to some committee of bureaucrats and pensioners. Creative destruction needs to happen in the economy. Bad businesses that can't afford to pay at market rate should just die because they are wasting resources. New businesses need that capital to thrive should get it. The economy should not suffer because of zombies. There are many young people who may never find a decent job in their prime years because we are busy propping up zombies like mumias, uchumi. Insolvency laws should deal with those who can't adjust to 18% Very flawed conclusions. Are you saying farmers should compete with mitumba traders for credit at 18%. Its obvious who will win thisshort sighted approach to credit. Eventually, the whole country is the loser. While EU and America are trying desperately to ensure their farmers are in business by giving subsidies and through market protection, we are busy telling our producers to compete with importers of chinese and japanese junk. Kweli tuko na shida. 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: 14,224 Location: nairobi
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tom_boy wrote:wukan 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.... You need to let the market work (willing lender/willing borrower). Efficient allocation of resources is best left to the market not to some committee of bureaucrats and pensioners. Creative destruction needs to happen in the economy. Bad businesses that can't afford to pay at market rate should just die because they are wasting resources. New businesses need that capital to thrive should get it. The economy should not suffer because of zombies. There are many young people who may never find a decent job in their prime years because we are busy propping up zombies like mumias, uchumi. Insolvency laws should deal with those who can't adjust to 18% Very flawed conclusions. Are you saying farmers should compete with mitumba traders for credit at 18%. Its obvious who will win thisshort sighted approach to credit. Eventually, the whole country is the loser. While EU and America are trying desperately to ensure their farmers are in business by giving subsidies and through market protection, we are busy telling our producers to compete with importers of chinese and japanese junk. Kweli tuko na shida. It's a harsh reality @tom_boy.. As I told you once on this very thread, you have brilliant ideas but they are disjointed from the reality of this jungle called Kenya. By the way most of the mitumba traders on the container scale would never borrow as they are cash rich.. The building in which COOP trades along Landhies Road was owned by a mitumba trader named Zipporah Kanyi Wanjiku who sold it to Ukulima Sacco! I too would love to farm, but instead I choose to invest in real estate coz that's where the money is found
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Rank: Elder Joined: 12/7/2012 Posts: 11,935
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obiero wrote:tom_boy wrote:wukan 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.... You need to let the market work (willing lender/willing borrower). Efficient allocation of resources is best left to the market not to some committee of bureaucrats and pensioners. Creative destruction needs to happen in the economy. Bad businesses that can't afford to pay at market rate should just die because they are wasting resources. New businesses need that capital to thrive should get it. The economy should not suffer because of zombies. There are many young people who may never find a decent job in their prime years because we are busy propping up zombies like mumias, uchumi. Insolvency laws should deal with those who can't adjust to 18% Very flawed conclusions. Are you saying farmers should compete with mitumba traders for credit at 18%. Its obvious who will win thisshort sighted approach to credit. Eventually, the whole country is the loser. While EU and America are trying desperately to ensure their farmers are in business by giving subsidies and through market protection, we are busy telling our producers to compete with importers of chinese and japanese junk. Kweli tuko na shida. It's a harsh reality @tom_boy.. As I told you once on this very thread, you have brilliant ideas but they are disjointed from the reality of this jungle called Kenya. By the way most of the mitumba traders on the container scale would never borrow as they are cash rich.. The building in which COOP trades along Landhies Road was owned by a mitumba trader named Zipporah Kanyi Wanjiku who sold it to Ukulima Sacco! I too would love to farm, but instead I choose to invest in real estate coz that's where the money is found Subsidies (like to farmers or a sector)is given by Governments not private institutions like banks!!! In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Elder Joined: 6/23/2009 Posts: 14,224 Location: nairobi
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Angelica _ann wrote:obiero wrote:tom_boy wrote:wukan 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.... You need to let the market work (willing lender/willing borrower). Efficient allocation of resources is best left to the market not to some committee of bureaucrats and pensioners. Creative destruction needs to happen in the economy. Bad businesses that can't afford to pay at market rate should just die because they are wasting resources. New businesses need that capital to thrive should get it. The economy should not suffer because of zombies. There are many young people who may never find a decent job in their prime years because we are busy propping up zombies like mumias, uchumi. Insolvency laws should deal with those who can't adjust to 18% Very flawed conclusions. Are you saying farmers should compete with mitumba traders for credit at 18%. Its obvious who will win thisshort sighted approach to credit. Eventually, the whole country is the loser. While EU and America are trying desperately to ensure their farmers are in business by giving subsidies and through market protection, we are busy telling our producers to compete with importers of chinese and japanese junk. Kweli tuko na shida. It's a harsh reality @tom_boy.. As I told you once on this very thread, you have brilliant ideas but they are disjointed from the reality of this jungle called Kenya. By the way most of the mitumba traders on the container scale would never borrow as they are cash rich.. The building in which COOP trades along Landhies Road was owned by a mitumba trader named Zipporah Kanyi Wanjiku who sold it to Ukulima Sacco! I too would love to farm, but instead I choose to invest in real estate coz that's where the money is found Subsidies (like to farmers or a sector)is given by Governments not private institutions like banks!!! Wait. Which bank has been given a subsidy by the state
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Rank: Elder Joined: 6/23/2009 Posts: 14,224 Location: nairobi
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Rank: Member Joined: 10/26/2015 Posts: 151
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If the Banks accede to KQs demands, will the debts reflect on their books as a write off?
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Rank: Elder Joined: 6/23/2009 Posts: 14,224 Location: nairobi
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MadDoc wrote:If the Banks accede to KQs demands, will the debts reflect on their books as a write off? My thinking is that it would be classified as a write off but with a corresponding asset increase classified as listed security, thereafter any gains from sales will be indicated as write backs, with any surplus booked as profit
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Rank: Member Joined: 10/26/2015 Posts: 151
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obiero wrote:MadDoc wrote:If the Banks accede to KQs demands, will the debts reflect on their books as a write off? My thinking is that it would be classified as a write off but with a corresponding asset increase classified as listed security, thereafter any gains from sales will be indicated as write backs, with any surplus booked as profit Further drop in profits expected
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Rank: Elder Joined: 6/23/2009 Posts: 14,224 Location: nairobi
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MadDoc wrote:obiero wrote:MadDoc wrote:If the Banks accede to KQs demands, will the debts reflect on their books as a write off? My thinking is that it would be classified as a write off but with a corresponding asset increase classified as listed security, thereafter any gains from sales will be indicated as write backs, with any surplus booked as profit Further drop in profits expected Further drops in which company? Definitely not Kenya Airways
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