wukan wrote:Quote:The defunct government refinanced the loan with KCB over what it claimed were unfavourable conditions set by Equity, including a lending rate of 20 per cent and a 60-month repayment period.
KCB bought out the loan in April 2014, slashing the lending rate to 13 per cent, lengthening maturity of the debt to eight years and giving a six-month grace repayment period.
Quite clearly interest rates are not the problem. Lower interest rates and longer maturity and still defaults. Resource allocation and management is the issue. Why would you borrow to pay taxes and pensions?
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City Hall seeks new terms for Sh4.5 billion KCB loanhttps://www.businessdail...illion-kcb-loan-3311014
City Hall has revealed plans to restructure a Sh4.45 billion KCB Group loan in a bid to end a legal showdown with the lender and avoid property auction.
City Hall did not disclose if it will seek a review of the interest rate from the 13 percent that KCB Group charged after it
inherited the loan from Equity Bank .
The two are locked in a legal dispute after KCB Group sought court orders last year to enforce collection of the debt raising fears of property auction to recover the money.
KCB Group inherited the loan from Equity Bank in September 2014 and offered City Hall a grace period of six months before it could start servicing the debt over eight years.
Equity lent the now defunct Nairobi City Council Sh5 billion in 2011 to pay statutory deductions but the loan was transferred to KCB Group.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett