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Beware of Barclay Loans
Rank: Elder Joined: 2/7/2007 Posts: 11,935 Location: Nairobi
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Mozenrat, Keep it that way........Clean until i win....-:) @Mwenza, Stick to objective posting.Am tempted to think you are content with cheering and have no facts. Yombo dhier....!! Nothing great was ever achieved without enthusiasm.
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Rank: Member Joined: 9/21/2006 Posts: 422 Location: Nairobi
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Sacco is still the cheapest and the best. Most saccos are evolving from long term mismanagement and with the amendements of the law and the establishment of the Sacco Regulatory Authority,the illiterate wazees managing some saccos because they own large chanks of coffee or tea farms will go!
With all due respect,somebosy taking a loan and being told that interest is 1% and accepts cannot be helped! Where on earth can one ger a loan of 1% per ANNUM?
The future is already here!
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Rank: Elder Joined: 4/22/2009 Posts: 2,863
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@ Njung'e Thot i was just being a gentleman by apologising to extrablessed because you are the one who asked me to go slow on her. WOULD RATHER DIE FIGHTING 4 MY RIGHTS THAN LIVE FOREVER WITHOUT ANY RIGHTS IF YOU EXPECT ME TO POST ANYTHING POSITIVE ABOUT ASENO, YOU MAY AS WELL SIT ON A PIN
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Rank: Veteran Joined: 5/18/2008 Posts: 796
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@Njung'e
.... I'd seen that one coming....
... That's why I researched on the exact fees charged by banks for a loan and not relied on the bogus figures Mr [dijkstra] gave....
... In the Stanchart case I now have Bank charges of Kshs. 7,800...
... Subtract that from the Kshs. 16K given by Mr [dijkstra] .... u have Kshs. 8,200
....The bank fellow now has... 14,896.48 +8200 = Kshs. 23,096.48
... The sacco fellow has Kshs. 16,000 for the two extra years...
... Or better yet,lets assume compound interest,he has Kshs. 17,971.20
The bank fellow is still left with a whole Kshs.5,125.80
So Njung'e,where are we???
This started out as a discourse on the interest paid back... and so far the only saving grace for the Sacco are these extra charges from the bank which both me and Mwenza conceded from the very first post....
PS: apologies for the mistake in the previous post... I'd forgotten that the 1st years Sacco interest had already been used up.
PS: The 10K repayments are inclusive of principal and interest... so he has nothing over and above to save...
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Rank: Elder Joined: 2/7/2007 Posts: 11,935 Location: Nairobi
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@Mozenrat, You simply deducted the 16K straight from the 'original' SACCO loan......Yes?....If my SACCO dude is saving as per the book,his contribution would be 100K by the time he borrows....,.....climbing to 154 K at the end of first year of loan repayment,208K at the of the second year and 262K at the end of the loan.At 8%,Devidend,pay out would be 8K,12K,16.64K and 20.96K.....In reality the first 8K payable devidned is his money since he earns it before borrowing.What counts is the pay-out over the loan repayment which adds upto 49.6K........AND NOT the 24K you have penned........Pondi would say 'Mzee wa Sacco ako mbele kama mfuko wa shati' Yombo dhier....!! Nothing great was ever achieved without enthusiasm.
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Rank: Veteran Joined: 9/5/2007 Posts: 627
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@mozenrat! Aren't you wrongly assuming that the sacco guy, while repaying the loan for the 3 years will not be making contributions to the said sacco? From my knowledge, you cease to be a member of a sacco if you do not make contributions to the sacco for 3 consecutive months. Please adjust your figures to reflect the monthly contributions then we see which is better!
Immorality: The morality of those who are having a better time!
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Rank: Elder Joined: 4/22/2009 Posts: 2,863
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@ Njung'e BTW,this 'little knowledge is........' did not come from me if you care to check the previous posts carefully. WOULD RATHER DIE FIGHTING 4 MY RIGHTS THAN LIVE FOREVER WITHOUT ANY RIGHTS IF YOU EXPECT ME TO POST ANYTHING POSITIVE ABOUT ASENO, YOU MAY AS WELL SIT ON A PIN
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Rank: Elder Joined: 2/7/2007 Posts: 11,935 Location: Nairobi
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@Sasha, That's why my man (Sacco dude) has savings of 262K by the end of the loan.I have factored in 10% of basic salary,which is actually the minimum allowable,besides the normal 100 bob for 5 mandatory shares and a further 1440 bob insurance for savings and loans payable once a year....... Yombo dhier....!! Nothing great was ever achieved without enthusiasm.
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Rank: Elder Joined: 4/22/2009 Posts: 2,863
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@ Njung'e @ Sasha We are now complicating the computations.......where is the SACCO dude getting the extra money for his monthly contributions from? Cant the bank dude use the same source to offset his loan or even better continue keeping the money under his mattress every month? The analysis my friend Mozenrat has come up with assumes that there is no further injection of funds from external sources,otherwise we may also argue that the bank dude has a pedigree cow at his disposal which he can sell.....he can also sell his mattress. WOULD RATHER DIE FIGHTING 4 MY RIGHTS THAN LIVE FOREVER WITHOUT ANY RIGHTS IF YOU EXPECT ME TO POST ANYTHING POSITIVE ABOUT ASENO, YOU MAY AS WELL SIT ON A PIN
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Rank: Veteran Joined: 9/5/2007 Posts: 627
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@mwenza
If that is his assumption (@mozenrat: please confirm) then all his computations are null and void. You have to make contributions to a sacco to continue to be a member of said sacco!
Immorality: The morality of those who are having a better time!
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Rank: Elder Joined: 2/16/2007 Posts: 2,114
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@mozenrat,
Since SACCOs are reaping more from interest payments than the banks(as you have proved )why don't the banks all convert to SACCOS after which they will be laughing more.........
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Rank: Elder Joined: 2/22/2009 Posts: 2,449 Location: Africa
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Pardon me coz I'm not a banking expert but from my experience,Saccos charge interest on reducing balance. I believe banks charge interest on the principal. I still see the Sacco loan taking the day anyway. @ mozenrat,since you are the expert on interest calcualtions you can correct me if i'm wrong coz i've never taken a bank loan 
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Rank: Veteran Joined: 5/18/2008 Posts: 796
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@Njung'e..
this is precisely why I had insisted that we limit the scope of this discourse to Interest charged...
Otherwise,once you introduce these other figures,then I can as well argue that while your 100k was stuck in the sacco in the year before taking out the loan... I was using mine to trade and made more than just 8%...
In addition,if the Sacco guy has 4,500 a month to save (54,000 a year) so does the bank guy... Which he could also be trading at or at more than 8% a year..
In the third year,the Sacco guy is saving 4,500 a month to obtain returns of only 8% while he bank guy now has 14,500 a month to trade...
Bank loan qualification is 3 months while for most Saccos I know,its 6 months. In the 3 month differential,how much do you think the bank guy could have made with the 300k.
I'm telling you,in real life where people use money to make more money,the difference between taking out a Sacco loan and a Bank loan is negligible...
@shak,
You're neither wrong nor right....
It depends on the specific contract...
Most unsecured bank loans are charged interest on reducing balance...
But I've heard that Equity Bank offers Asset Finance on straight line basis
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Rank: Elder Joined: 4/22/2009 Posts: 2,863
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@ Sasha In comparative analysis,you define the variables and keep everything else constant.......surely are you not giving the sacco dude an advantage by giving him extra cash to continue making his monthly contributions while denying the bank dude access to the same source of extra cash? of course we are privy to the sacco requirements thats why the sacco man might throw in the towel early. WOULD RATHER DIE FIGHTING 4 MY RIGHTS THAN LIVE FOREVER WITHOUT ANY RIGHTS IF YOU EXPECT ME TO POST ANYTHING POSITIVE ABOUT ASENO, YOU MAY AS WELL SIT ON A PIN
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Rank: Elder Joined: 2/22/2009 Posts: 2,449 Location: Africa
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@ Mwenza,I was just thinking,have you ever heard of a person who was rendered bankrupt after taking a SACCO loan? There are enough cases of bankruptcy by those who have taken bank loans. Go through the posts and study the numerous benefits that accrue to a SACCO member. Your interest calculations do work in theory but when it comes to the real deal,given a choice,99% of Kenyans will take a SACCO loan any day. Ask yourself why. Do a more broadbased study that does not just cover interest charges.
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Rank: Elder Joined: 4/22/2009 Posts: 2,863
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@ Shak Thank u for being sober in your reasoning. May be you need to go back to my very first post which generated this argument.........It was purely based on interest charges. Thats why my friend Mozenrat and i have restricted ourselves to that issue only. Meanwhile the advantages of saccos are universally acknowledged and nobody is disputing that. However there is need to demystify the notion that sacco loans are like freebies taken at no cost. Ultimately you are better off not taking any loan( from whichever source) if you can manage. WOULD RATHER DIE FIGHTING 4 MY RIGHTS THAN LIVE FOREVER WITHOUT ANY RIGHTS IF YOU EXPECT ME TO POST ANYTHING POSITIVE ABOUT ASENO, YOU MAY AS WELL SIT ON A PIN
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Rank: Elder Joined: 2/22/2009 Posts: 2,449 Location: Africa
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@ mwenza,i acknowledge your post and have taken this excerpt from a previous posting you made: '@ Mozenrat.......Am happy at least one person can see my argument. My argument was really not about the pros and cons of saccos......for the record av been a member of a reputable one since 1992.... but rather in every situation,there is always room for improvement. Granted,SACCOS are not in any way comparable to banks when it comes to borrowing from them but that does not mean they cant be enhanced to be more attractive to members......'
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Rank: Elder Joined: 4/22/2009 Posts: 2,863
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@ Shak Thats a fantastic job by you. Hope in the process u also saw what somebody stated to the effect that 'little knowledge is.........' in one of the replies. WOULD RATHER DIE FIGHTING 4 MY RIGHTS THAN LIVE FOREVER WITHOUT ANY RIGHTS IF YOU EXPECT ME TO POST ANYTHING POSITIVE ABOUT ASENO, YOU MAY AS WELL SIT ON A PIN
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Rank: Member Joined: 9/4/2008 Posts: 48
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Mozenrat,you are quite a smart chap with some nice arguments,but you overlook a lot of facts with your discourse. 1. Loan eligibility in saccos is membership through payment (even 100 bob) for six months. Assume therefore novestor saves KES 600/- over six months at sacco and puts the KES 99,400/- somewhere (or under mattres),or trades with it as you say,OK. 2. Novestor Takes the 99,400/- from under mattress,takes to sacco,and applies for three times the amount (300K). Where does this leave your analysis? Learn something new everyday Learn Something New Every Day!
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Rank: Veteran Joined: 5/18/2008 Posts: 796
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@Novestor...
I can see you're trying to draw me out...
I've already stated that our discourse was limited to interest charged....
... and that I only went into that long analysis in response to Tito44...
...Otherwise those benefits that Njung'e and yourself are raising were acknowledged by myself nearly 50 posts ago...
Believe me,I have used the trick you've described once to obtain cash from a Sacco...
The rules at my Sacco are that you would earn interest on the 600 bob.... If you used the trick you've described... we would be at the same place we were at before Njung'e raised the issue.... with the bank winning
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