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Law Capping interest rates
Rank: Elder Joined: 6/23/2009 Posts: 14,221 Location: nairobi
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KulaRaha wrote:rate cap, no rate cap, no difference, won't increase access to credit either way. That's the whole truth. Note is that retail segment was not affected at all but the SME and corporate are driving the repeal agenda. Not even because of the 14% but the 7% floor
KQ ABP 4.26
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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Ericsson wrote:KulaRaha wrote:rate cap, no rate cap, no difference, won't increase access to credit either way. But will enable GoK/Rotich access to $1.5bn from IMF They've never used that facility for as long as they've had it... And it's not like it's another loan to spend on useless projects... Waste of time imo Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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obiero wrote:KulaRaha wrote:rate cap, no rate cap, no difference, won't increase access to credit either way. That's the whole truth. Note is that retail segment was not affected at all but the SME and corporate are driving the repeal agenda. Not even because of the 14% but the 7% floor tbh rate cap saved banks from huge unsecured bad debt portfolios...imagine Kenyans who had borrowed to buy tvs/empty plots and drinks on weekends trying repay in the current economic environment... 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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KulaRaha wrote:obiero wrote:KulaRaha wrote:rate cap, no rate cap, no difference, won't increase access to credit either way. That's the whole truth. Note is that retail segment was not affected at all but the SME and corporate are driving the repeal agenda. Not even because of the 14% but the 7% floor tbh rate cap saved banks from huge unsecured bad debt portfolios...imagine Kenyans who had borrowed to buy tvs/empty plots and drinks on weekends trying repay in the current economic environment... Wangelipa tuu. We were there during Kibaki second term and treasury and banks came into an agreement to prevent a crisis Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Member Joined: 12/1/2007 Posts: 539 Location: Nakuru
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KulaRaha wrote:obiero wrote:KulaRaha wrote:rate cap, no rate cap, no difference, won't increase access to credit either way. That's the whole truth. Note is that retail segment was not affected at all but the SME and corporate are driving the repeal agenda. Not even because of the 14% but the 7% floor tbh rate cap saved banks from huge unsecured bad debt portfolios...imagine Kenyans who had borrowed to buy tvs/empty plots and drinks on weekends trying repay in the current economic environment... CHicken-egg... part ot 'the current environment' is due to low credit uptake due to stringency of the banks in giving loans (no pricing in risk) For investors as a whole, returns decrease as motion increases ~ WB
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Rank: Veteran Joined: 11/13/2015 Posts: 1,654
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KulaRaha wrote:Ericsson wrote:KulaRaha wrote:rate cap, no rate cap, no difference, won't increase access to credit either way. But will enable GoK/Rotich access to $1.5bn from IMF They've never used that facility for as long as they've had it... And it's not like it's another loan to spend on useless projects... Waste of time imo We got into this rate cap mess because of the lack of such a facility. In 2015 the currency came under speculative attack because CBK ran out of reserves trying to burn speculators(yours truly included  ). CBK played the same 2011 rule book by hiking t-bill rates and banks hiked interest rates so that you couldn't borrow from the banks @13% to buy the tbills at 26%. A standby facility is crucial especially with our trade deficit position.
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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winmak wrote:KulaRaha wrote:obiero wrote:KulaRaha wrote:rate cap, no rate cap, no difference, won't increase access to credit either way. That's the whole truth. Note is that retail segment was not affected at all but the SME and corporate are driving the repeal agenda. Not even because of the 14% but the 7% floor tbh rate cap saved banks from huge unsecured bad debt portfolios...imagine Kenyans who had borrowed to buy tvs/empty plots and drinks on weekends trying repay in the current economic environment... CHicken-egg... part ot 'the current environment' is due to low credit uptake due to stringency of the banks in giving loans (no pricing in risk) Nope. The current environment is purely created by GoK borrowing and inability to pay suppliers, nothing to do with banks. That is a fallacy. Banks would have reduced loans whether there was a cap or not...some sooner, others later. Business opportunities are like buses,there's always another one coming
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Rank: Veteran Joined: 4/23/2014 Posts: 931
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End of cheap loans as Uhuru okays scraping of Interest rate by September Read more at: https://www.standardmedi...k-loans-set-to-end-soon
“You can get in way more trouble with a good idea than a bad idea, because you forget that the good idea has limits.” - Ben Graham
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Rank: Elder Joined: 7/21/2010 Posts: 6,194 Location: nairobi
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why that far or it was forced unwillingly "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Member Joined: 10/6/2009 Posts: 587
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mlennyma wrote:why that far or it was forced unwillingly I think the International Mater F***ers (IMF) should have consulted the mad pigs in the pigsty (parliament) first before meeting Uhuru. Right now, most if not all of them are enjoying the cheap loans and adjusting the interest upward and hence the loans repayments may not resonate well with them. What happens if they throw that interest rate decapping proposal through the window?
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