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Law Capping interest rates
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maka
#621 Posted : Thursday, August 25, 2016 8:44:06 AM
Rank: Elder

Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
guru267 wrote:
newfarer wrote:
guru267 wrote:
obiero wrote:
guru267 wrote:
newfarer wrote:
guru267 wrote:
So now even JM has said he has no other option but to cut Wanjiku out of his portfolio.. Equitel loan products are looking shaky!

Interesting times indeed.,



Blackmail won't work. It is the law
. He will have to pay 7% to wanjiku


He has no problem with the law... Wanjiku will just have to come up with the minimum deposit of KES 1,000,000 to open an interest bearing savings account...


There is a good portion of Kenyans that will and can afford to raise that minimum 1m sum


Good for them... Too bad that portion is a minority...

The majority will be at 0% on deposits and will then be shafted by increased transaction fees..

Then the transaction fee will become the next battlefront. Banks can run but they can't hide. The law does not set a minimum deposit limit for interest bearing thus the minimum is presumed to be Ksh.1.bytheway with the heat on banks it would be insane to set the 1 million minimum. They will just be vindicating the president and mps


The banks will do what the banks in other countries did to get such laws reversed... Simply lock out Wanjiku.. Send her back to saving in the mattress to avoid high transaction fees and borrowing from shylocks offering her legs as collateral.

This new law is very clear.. Cap minimum interest on interest bearing accounts... So the Banks will set a minimum balance of KES 1,000,000 to open an interest bearing account..

The rest of the accounts will be structured as current accounts earning 0%...


Good I will be keeping the bare minimum....
possunt quia posse videntur
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KulaRaha
#622 Posted : Thursday, August 25, 2016 8:48:00 AM
Rank: Elder

Joined: 7/26/2007
Posts: 6,514
10-year Treasury Bond 15.039% vs 14.393% in March.

Why lend at 14.5% to me when I can default?


Business opportunities are like buses,there's always another one coming
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Impunity
#623 Posted : Thursday, August 25, 2016 8:49:07 AM
Rank: Elder

Joined: 3/2/2009
Posts: 26,331
Location: Masada
murchr wrote:
mikanjoroge wrote:
I have a question. Will this law affect those who already had loans, or is it only for new loans from the date of "operationalization" or "gazettement" of the law?


Old loans remain unless you refinance


He can top up his old loans under new terms.

Interesting times indeed.

Imagine having taken a 2M loan at 21% pa, after 2 years top it up under new rate, 14%pa.

smile
Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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FRM2011
#624 Posted : Thursday, August 25, 2016 8:51:24 AM
Rank: Elder

Joined: 11/5/2010
Posts: 2,459
guru267 wrote:
FRM2011 wrote:
The mwananchi bank's are in real trouble. They have facilities called micro loans that are secured with household goods I.e. chattels mortgage.

Am looking at a letter of offer for 300,000 from coop bank.

Int rate : 2% pm flat
Nego fee : 2.5%

After adding insurance, guarantee and hypothecation fees, the APR is 45.2%.

You read that right. These pranksters have been shafting wanjiku in the name of availing credit to her.

Am told equity is much much worse. Will share once I see a sample offer letter.


Walk into your nearest bank and apply for a loan under the above security structure at 14.5% p.a. and all you will be looking at is a decline letter.


@guru, the person in trouble here is not the borrower. The bill has just turned off a tap that was giving coop interest revenue at four times the other loans.

Am looking at equity figures right now and if JM tells you he will abandon wanjiku, he is lieing. If he does, or dares to slow down lending to Wanjiku, he will simply close shop.

After 21 days, Equity's interest expense jumps by 350%.
These schlock interest revenues dry up.

It's basic survival for equity.
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alma1
#625 Posted : Thursday, August 25, 2016 8:52:56 AM
Rank: Elder

Joined: 9/19/2015
Posts: 2,871
Location: hapo
guru267 wrote:
FRM2011 wrote:
The mwananchi bank's are in real trouble. They have facilities called micro loans that are secured with household goods I.e. chattels mortgage.

Am looking at a letter of offer for 300,000 from coop bank.

Int rate : 2% pm flat
Nego fee : 2.5%

After adding insurance, guarantee and hypothecation fees, the APR is 45.2%.

You read that right. These pranksters have been shafting wanjiku in the name of availing credit to her.

Am told equity is much much worse. Will share once I see a sample offer letter.


Walk into your nearest bank and apply for a loan under the above security structure at 14.5% p.a. and all you will be looking at is a decline letter.



pole sana guru but please get used to the life that other banks worldwide have to go through. The only people going to suffer in this are the shylock bank employees Wanjiku shall be just fine.

I think this is even going to be therapeutic to Kenyans. Stop being shafted in the name of development by thieves.

That is all Kenyan banks have been THIEVES AND ROBBERS.

From2011 there is what the banks say about the economy. I too don't like capping stuff.

Then there is what they actually do.....These people are just thieves.

All they do is take money from Wanjiku at 1% then look for Wanjiku's sister and give her the same money at 40%.

Then go buy some journalists who call them the biggest geniuses the world has ever seen. All the while stealing from the poor.

If a bank manager cannot make money with a spread of 7% then why the heck is he still working? But these were just theives, they don't know how to make real money.

If you are buying bank stocks in Kenya thinking things shall be better in the future, wewe ni mjinga sana. Those days are over and done....Over!
Thieves are not good people. Tumeelewana?
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quicksand
#626 Posted : Thursday, August 25, 2016 9:05:49 AM
Rank: Veteran

Joined: 7/5/2010
Posts: 2,061
Location: Nairobi
newfarer wrote:
guru267 wrote:
obiero wrote:
guru267 wrote:
newfarer wrote:
guru267 wrote:
So now even JM has said he has no other option but to cut Wanjiku out of his portfolio.. Equitel loan products are looking shaky!

Interesting times indeed.,



Blackmail won't work. It is the law
. He will have to pay 7% to wanjiku


He has no problem with the law... Wanjiku will just have to come up with the minimum deposit of KES 1,000,000 to open an interest bearing savings account...


There is a good portion of Kenyans that will and can afford to raise that minimum 1m sum


Good for them... Too bad that portion is a minority...

The majority will be at 0% on deposits and will then be shafted by increased transaction fees..

Then the transaction fee will become the next battlefront. Banks can run but they can't hide. The law does not set a minimum deposit limit for interest bearing thus the minimum is presumed to be Ksh.1.bytheway with the heat on banks it would be insane to set the 1 million minimum. They will just be vindicating the president and mps

True. Now would be a dangerous time to start playing tricks. Politicians are playing to the gallery. The banks should eat this and shut up,...at least until after 2017. And even then, doing things like setting high minimum account balances will have repercussions, like building another wave of resentment which politicians will use as ammunition in the next round.
Kenya is a versatile place, it survived 24 years of Moi....before Equity, I remember the likes of Barclays would require a minimum of 20K to keep an account.
I see no upsides for banks in pulling dirty tricks, and I don't believe in all this doomsday theorizing about how Wanjiku will not access credit. May be I am wrong, but I want to see it play out. Remember when TBills had a yield of 31%? No bank would look in a mwananchi's direction. Kenyans survived. F*** all this 'oooh Wanjiku will suffer, there will be a credit crunch' bs ...
Let us try this, it is new, lets see where it will take us. Folly is believing all these lies spewed by banksters (like they have been doing for years) and expect things will change. Peace.
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Sober
#627 Posted : Thursday, August 25, 2016 9:10:28 AM
Rank: Elder

Joined: 11/27/2007
Posts: 3,604
Impunity wrote:
murchr wrote:
mikanjoroge wrote:
I have a question. Will this law affect those who already had loans, or is it only for new loans from the date of "operationalization" or "gazettement" of the law?


Old loans remain unless you refinance


He can top up his old loans under new terms.

Interesting times indeed.

Imagine having taken a 2M loan at 21% pa, after 2 years top it up under new rate, 14%pa.

smile


I've not read anywhere on when this law will be effective.

If it does not help previous loan holders it means i can borrow at 13% in bank J and go offset my Bank B loan which is charging 25% interest then live happily there after hoping the CBK rate will not go to 15%
African parents don't know how to say sorry.. the closest you will get to a sorry is a 'have you eaten'
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KulaRaha
#628 Posted : Thursday, August 25, 2016 9:23:55 AM
Rank: Elder

Joined: 7/26/2007
Posts: 6,514
Which rate is CBK base rate?
Business opportunities are like buses,there's always another one coming
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holycow
#629 Posted : Thursday, August 25, 2016 9:30:59 AM
Rank: Veteran

Joined: 11/11/2006
Posts: 972
Location: Home
Sober wrote:


I've not read anywhere on when this law will be effective.

If it does not help previous loan holders it means i can borrow at 13% in bank J and go offset my Bank B loan which is charging 25% interest then live happily there after hoping the CBK rate will not go to 15%



Plot Twist, Bank J thinks you high risk and decides to lend to GoK at 15.

Quote:
This month the Central Bank of Kenya offered a 10 year Treasury Bond for a total amount of up to Kshs 25 Billion. The total number of bids received was 795 amounting to Kshs 26.31 Billion. The Weighted average rate for successful bids was 15.039%.
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Shak
#630 Posted : Thursday, August 25, 2016 9:33:46 AM
Rank: Elder

Joined: 2/22/2009
Posts: 2,449
Location: Africa
Bank stocks plunging.Equity has hit a low of 33bob
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