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Law Capping interest rates
Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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moneydust wrote:Jon Jones wrote:This is how I expect the situation to unfold.
1. Equity, Family Bank, Co-op etc, who largely cater for Wanjiku will be the worst affected because they are technically in a riskier business. The quality of their customers is very bad i.e largely Wanjiku.
2. KCB, I&M, DTB etc that cater for the upper middle class and the affluent (for KCB it is institutions), they will be better positioned because their customers have a higher value and less risk.
Assuming two banks lend at 14.5%, Equity and I & M, I & M will have less to worry about considering the nature of its customers. This bill is a kick in the nuts of James Mwangi and Gideon Muriuki I beg to differ,banks that have a wide footprint and bank the ordinary mwananchi will have access to deposits at almost zero cost since they will be paying nothing for the small deposits in their customer accounts. Infact the banks that will have the lowest cost on their deposits will win the coming war. With the capping it means the battle for quality clients is on,it will all be about who can offer the lowest of the lowest interest rate to that bluechip customer. what are you saying? The Act stipulates that banks should pay atleast 70% of the CBR rate to customer deposits, How then will the small banks access deposits at zero cost? If Obiero did it, Who Am I?
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Rank: Member Joined: 1/31/2007 Posts: 304
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Swenani wrote:moneydust wrote:Jon Jones wrote:This is how I expect the situation to unfold.
1. Equity, Family Bank, Co-op etc, who largely cater for Wanjiku will be the worst affected because they are technically in a riskier business. The quality of their customers is very bad i.e largely Wanjiku.
2. KCB, I&M, DTB etc that cater for the upper middle class and the affluent (for KCB it is institutions), they will be better positioned because their customers have a higher value and less risk.
Assuming two banks lend at 14.5%, Equity and I & M, I & M will have less to worry about considering the nature of its customers. This bill is a kick in the nuts of James Mwangi and Gideon Muriuki I beg to differ,banks that have a wide footprint and bank the ordinary mwananchi will have access to deposits at almost zero cost since they will be paying nothing for the small deposits in their customer accounts. Infact the banks that will have the lowest cost on their deposits will win the coming war. With the capping it means the battle for quality clients is on,it will all be about who can offer the lowest of the lowest interest rate to that bluechip customer. what are you saying? The Act stipulates that banks should pay atleast 70% of the CBR rate to customer deposits, How then will the small banks access deposits at zero cost? You must differentiate between current account deposits and fixed /savings account deposits.It will be ridiculous to expect a bank to pay you interest on deposits you will be withdrawing tomorrow without notice.You can also expect the banks to raise the the threshold for interest bearing deposits.
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Rank: Member Joined: 2/20/2015 Posts: 468 Location: Nairobi
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Does this also affect mobile banking loans e.g Equitel (24%p.a), M-shwari and such?
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Rank: Elder Joined: 3/2/2009 Posts: 26,331 Location: Masada
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Swenani wrote:moneydust wrote:Jon Jones wrote:This is how I expect the situation to unfold.
1. Equity, Family Bank, Co-op etc, who largely cater for Wanjiku will be the worst affected because they are technically in a riskier business. The quality of their customers is very bad i.e largely Wanjiku.
2. KCB, I&M, DTB etc that cater for the upper middle class and the affluent (for KCB it is institutions), they will be better positioned because their customers have a higher value and less risk.
Assuming two banks lend at 14.5%, Equity and I & M, I & M will have less to worry about considering the nature of its customers. This bill is a kick in the nuts of James Mwangi and Gideon Muriuki I beg to differ,banks that have a wide footprint and bank the ordinary mwananchi will have access to deposits at almost zero cost since they will be paying nothing for the small deposits in their customer accounts. Infact the banks that will have the lowest cost on their deposits will win the coming war. With the capping it means the battle for quality clients is on,it will all be about who can offer the lowest of the lowest interest rate to that bluechip customer. what are you saying? The Act stipulates that banks should pay atleast 70% of the CBR rate to customer deposits, How then will the small banks access deposits at zero cost? Its only fixed accounts which should enjoy the 70% of the CBR rate...what banks will do is simply to raise the minimum balance to open a saving account to be something like Kes.1,000,000...anything less will be taken to the current account, which will be charged exhobitant ledger fees. Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Member Joined: 2/20/2007 Posts: 767
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Swenani wrote:moneydust wrote:Jon Jones wrote:This is how I expect the situation to unfold.
1. Equity, Family Bank, Co-op etc, who largely cater for Wanjiku will be the worst affected because they are technically in a riskier business. The quality of their customers is very bad i.e largely Wanjiku.
2. KCB, I&M, DTB etc that cater for the upper middle class and the affluent (for KCB it is institutions), they will be better positioned because their customers have a higher value and less risk.
Assuming two banks lend at 14.5%, Equity and I & M, I & M will have less to worry about considering the nature of its customers. This bill is a kick in the nuts of James Mwangi and Gideon Muriuki I beg to differ,banks that have a wide footprint and bank the ordinary mwananchi will have access to deposits at almost zero cost since they will be paying nothing for the small deposits in their customer accounts. Infact the banks that will have the lowest cost on their deposits will win the coming war. With the capping it means the battle for quality clients is on,it will all be about who can offer the lowest of the lowest interest rate to that bluechip customer. what are you saying? The Act stipulates that banks should pay atleast 70% of the CBR rate to customer deposits, How then will the small banks access deposits at zero cost? This whole hullabaloo about risk of the customer is just theories created by banks to keep rates high. If I can lend to you 100k at 24%, why should I not lend it to you at 14%. Are you more likely to default at 24% or at 14%. Its all nonsense ceated by the banking industry. They will lend to Wanjiku at 14% as long as Wanjiku has not defaulted on a previous loan. Banks will just have to work harder at vetting the borrowers, to seperate the grain from the chaff. Like I said before, it will be a dance between banks and Government. Too much money chasing govt paper and the rate will come down. Banks will be forced to create a balance between lending to govt or lending to Wanjiku. Banks cannot afford to be awash with cash. Thats a fact. Watch this space. In fact , if you are employed, earning good money in a stable job, get ready to start getting spammed by these banks. 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: 3/2/2009 Posts: 26,331 Location: Masada
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kawi254 wrote:Does this also affect mobile banking loans e.g Equitel (24%p.a), M-shwari and such? M-suruari is 90%pa...7.5&% pm. Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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Impunity wrote:kawi254 wrote:Does this also affect mobile banking loans e.g Equitel (24%p.a), M-shwari and such? M-suruari is 90%pa...7.5&% pm. No "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Elder Joined: 3/2/2009 Posts: 26,331 Location: Masada
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murchr wrote:Impunity wrote:kawi254 wrote:Does this also affect mobile banking loans e.g Equitel (24%p.a), M-shwari and such? M-suruari is 90%pa...7.5&% pm. No How much it is? Thats the rate I have known when they first set shop. Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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Impunity wrote:murchr wrote:Impunity wrote:kawi254 wrote:Does this also affect mobile banking loans e.g Equitel (24%p.a), M-shwari and such? M-suruari is 90%pa...7.5&% pm. No How much it is? Thats the rate I have known when they first set shop. I think thats about correct... possunt quia posse videntur
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Rank: Member Joined: 9/9/2010 Posts: 784 Location: ant hill - red hill
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Kabando wa Kabando bill should also be effected asap to make TB available/accessible to the masses. The greatest act of bravery is chancing a fart while suffering from diarrhoea
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