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Equity Bank on personal loans
Rank: Member Joined: 10/11/2008 Posts: 19
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I hear that nowadays if you want a salary loan from them you need to have 3 salaried guarantors-1 from your institution and 2 from other institutions but whose salos pass thro the bank. Now aint this blackmail - i mean its like telling you that if you want a loan from us you need to tell other institutions to have their staff open accounts with us.or is it another way of saying 'we are restricting issuance of loans coz of the harsh economy' anyone with insight on this
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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Get serious! They are only trying to ensure that they will get their money back! Do you think it would be easier to produce a title deed to secure the loan? Look at the bad (personal) loans books of other banks that don't insist on such guarantees. Anyway: With about 60% of all bank accounts in the country,it is unlikely that you don't have a friend who has an account in Equity. WaKenya saa zingine mnashangaza!!!!!!!!!!!!!!! Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: Member Joined: 6/29/2006 Posts: 184
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@ gabrini
put urself in equity's shoes
if u had money to lend out,wat would be ur requirements?
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Rank: Member Joined: 10/11/2008 Posts: 19
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@Nahdy
just guarantors,be it from the same institution or not as long as they have sound accounts with me.my bone of contention is not repayment its about sourcing guarantors from other institutions.Do other banks have such dictatorial conditions
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Rank: Elder Joined: 5/27/2008 Posts: 3,760
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The conditions shouldn't be a problem unless your guarantors expect you to default,which could be why you are unable to get them to guarantee.
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Rank: Chief Joined: 1/3/2007 Posts: 18,098 Location: Nairobi
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Jameni... haven't you read the horror stories? If you guarantee someone & he defaults kidgo,EB will debit your account (salo paid through EB) immediately. Which means you have to run around bila chapa. *** Do NOT guarantee anyone at EB unless you are 100% sure the loanee is totally upstanding AND can pay back the loan. Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/3/2007 Posts: 18,098 Location: Nairobi
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A friend of mine (EKE) switched his salo account from EB after someone (OBF) he had guaranteed defaulted. EB took EKE's cash (to the extent of the missed payment) without telling EKE. Akaenda ATM... wapi...? Jamaa/EKE thought he was stiffed by his employer kumbe it was EB's 'deduction' on behalf of OBF. ***OBF has been having financial problems so EKE is trying to 'de-guarantee' but unless OBF finds a suitable replacement... Long story short... EKE wanted a 'soft loan' from me! Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Veteran Joined: 11/2/2006 Posts: 1,206 Location: Nairobi
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@Gabrini With Equity giving out so many loans to 'normal mwananchi' the only way to protect themselves is to ensure that the guarantors have active and sound accounts with the bank....that's why you have requirement No.1 Requirement No.2 is to ensure that in case you and your company-mates are all fired or retrenched.....the bank will still be in a position to recover some money since they will have guarantors from another company as well.I know this because i saw it last week where around 38 people from the same company were retrenched.....and guess what.....they were guarantors of each other on loans.......so where will the bank get its money now that their salaries are over?? The course of the world is changed by those who dare dream! Formally employed people often live their employers' dream & forget about their own.
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Rank: Chief Joined: 1/3/2007 Posts: 18,098 Location: Nairobi
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After reading & listening to others,I would buy EB shares,use them as a bank but NEVER guarantee someone else... EB will drag me down as well over a small glitch. Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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@VVS: that's the meaning of the word 'GUARANTEE' If the borrower defaults,the guarantor pays up! It's that simple...especially if the guarantor also banks with the same bank. Many Kenyans imagine that banks 'GIVE' loans! Loans are LENT,to be paid back on the terms agreed....strictly. So don't complain if one bank seems to be asking for 'too many' guarantors; just go to another bank....there are over 50 in Kenya! Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: Chief Joined: 1/3/2007 Posts: 18,098 Location: Nairobi
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Oh,I agree... I am just stating what I would not do... (and I encourage others to be ultra-conservative)... better safe than sorry... Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 6/3/2006 Posts: 553
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1) reduce their risk 2) free marketing of their products smart The thicker the thigh the sweeter the pie. The thicker the thigh the sweeter the pie.
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Rank: Member Joined: 3/17/2008 Posts: 567 Location: Nairobi
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See what the good book says about guaranteeing someone for loans
Proverbs 6:1
1 My son,if you have put up security for your neighbor,if you have struck hands in pledge for another,........ 4 Allow no sleep to your eyes,no slumber to your eyelids. Free yourself,like a gazelle from the hand of the hunter,like a bird from the snare of the fowler.
Proverbs 11:15
He who is guarantor for a stranger will surely suffer for it,But he who hates being a guarantor is secure.
It insists you know intimately the person you are guaranteeing. Dont complain when a bank comes for you.
Be greedy when others are fearful,be fearful when others are greedy.
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Rank: Member Joined: 3/6/2009 Posts: 172
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ahh so they came out. The EB apologists.
There is something seriously wrong with banking in Kenya and trying to pretend all is fine and dandy and they are doing the right thing is rather disengenious.
I was at a small gathering this week about ecommerce and the banking industry and it all came out plain and clear. Kenyan banks are way behind the curve when it comes to banking. They operate like shylocks and are happy doing so. That is why their shareholders are happy. But not for long.
If a bank sends you to go get guarantors to give you a loan,it shows it does not even trust its clientelle,so why go there in the first place? There is a Kenyan company currently trying to get banks to move to the 21st century by offering credit reports. Is equity taking advantage of it? No,they want you to go get a guarantor. ONLY IN KENYA!
For those who support this nonsence,does it stop defaults. No! But it does cutail borrowing. Mukiha and others,you are lucky,you have friends. I don't. To make matters worse,I have no need to have my friends know what I am borrowing,when and how much. This is a system for gossipers. It has only one intention. STOP BORROWING. It is only in Kenya and that is why we are still neanderthal in our thinking and posts in this forum.
Sorry for shouting but its true.
From 14% interest rates to getting guarantors,why do you complain everywhere on SK about the gap between the rich and the poor. Oh,some of you don't complain. The reason the dispora guys don't borrow here is simple. The Kenyan banking system is a shylock outfit that is supported by the law. Now Equity is its main player.
There was a time I wrote an article about Safcom. I said that I will buy it at 2 bob. I was hounded out of that forum,now who's laughing. I have said it before on this forum. If you love your money,avoid Kenyan banks as an investment. I can assure you that the so called fibre optics will destroy their business model of lending to a few at illegal prices and pretending they care. The shareholders will be left with paper. Worthless paper.
it is the 21st century,guarantors went the way of the dinosour. You will notice the people who support equity and this crap are shareholders of this company. It will fall like a domino very soon.
for the admin who removed my post about marked to market accounting. You can run but you can't hide for too long.
For those that wish to borrow,forget about equity. The interest paid will KILL your business. Go to your SACCO. Join a group and instead of giving out free money,insist on member paying an interest of even 2% on the funds they get at the end of the month.
Otherwise,go on complaining. The truth of the matter is ONLY FOOLS borrow at more than 14% when fed rates are at 7%. Only a fool becomes a guarantor. And it is all your fault.
Borrow at those rates and only equity shareholders are happy. Tell a friend you are borrowing and don't complain about the gossip in the neighbourhood. This equity thing is a house of cards. Mark my words. I am rarely wrong when it comes to looking at banking companies.
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Rank: Member Joined: 3/17/2008 Posts: 567 Location: Nairobi
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Crap.
Be greedy when others are fearful,be fearful when others are greedy.
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Rank: Elder Joined: 2/26/2008 Posts: 4,449
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How else do you suggest they offer loans without collateral in the current environment? boss,if bothered,why not simply go to the competition? You haven't ...simply meaning they're offering a better deal. work with it.
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Rank: Member Joined: 2/20/2007 Posts: 359
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@nanfor
you says, ..Mukiha...you are lucky,you have friends. I don't.
I says - interesting.
The model - easy lending and risk transfer thru debt swaps and instruments - u suggest we follow such as in the West,has been discredited and the west is busy trying to bring back conservative banking for the good of the whole world.
Western banks overexposed themselves thru unsecured easy loans and debt swaps. Now we have a global economic catastrophe. These banks u worship are now on the dole - feeding off the tax payer.
We had banks that did what u suggest,such as Trade Bank. Where r these banks 2day? EB tried that easy lending thingy for safcom shares n it was a disaster for borrowers n 4 the economy.
The world has come full circle n realized conservative banking is the only way we can all sleep well. U seem to be slow at catching on.
Yet,u r right about kenyan interest rates being too high. I guess the banks still operate as a loose cartel - no real competition.
When buying shares,ask yourself,would you buy the whole company?
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Rank: Veteran Joined: 11/21/2006 Posts: 1,590
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Nanfor-I admire your passionate dislike of Equity. Its wasted energy though. Can you do a post on the shares you like? Plse... www.mjengakenya.blogspot.comSehemu ndio nyumba
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Rank: Member Joined: 3/6/2009 Posts: 172
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@Mainat,unlike you,I have no emotions when I invest or look at any investment. I only look at the facts and figures. If they don't add up,I say so. You can agree or disagree but this is not a PNU/ODM argument.
You as a shareholder have the right to get new clients from this board. I on the other hand love my money and do my homework and won't be falling for Equity loans anytime soon.
@slykat
It would be good to stop using Kenyan bankers propaganda when advancing a point that was otherwise very good. The current economic downturn is not a product of lending based on good credit and individual responsibility. It is a result of poor lending practises that are practised by Equity lending to all and sundry.
Let me burst your bubble and advise you that lending on one's salary only is not an example of good lending practises. Especially when the salary is less than 200 dollars a month.
At the same time,there is nothing like a 'western bank'. That is a figment of your imagination. A bank is a bank and we can all agree that there was no such animal in Kenya before the white man came along.
When a bank asks you for 4 guarantors,then security then illegally (it is illegal all over the world) attaches your only source of income,it is wrong and immoral. This practise will not last for long. Case in point. No one in SK will be anyone's guarantor.
even more distressing is the practise of charging you shylock rates. To make matters worse,Kenyan banks do not tell you the total cost of your loan. This is the reason why otherwise good people find themselves in cases where they lose all their property. The banks have a habit of pulling a fast one on their client.
Now if that is hating on Equity,so be it but its a fact. Equity introduces new clients,then other banks steal those clients. Why? Because of immoral lending practises. We have seen this before with other banks and it is a course we took seriously in college. What happens to banks that have immoral lending practises.
I remember reading a long time ago on this very forum diaspora guys complaining about stockbrokers in Kenya. The argument then as it is now is that Kenya is special. We now can see the results of bad brokers. Banks aren 't special,they too die.
This is also going to be the case for banks that refuse to move with the rest of the world ati because Kenya is a special place. ATM's crashing is a very bad sign. Not lending in the guise of being more stringent is a bad sign. Don't believe me,but I would be careful about joining the Equity bandwagon.
Have a great day everyone.
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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@nanfor: please remember what the boo of God says: 'the love of money is the root of all evil' I remind you this because you have repeated twice that you love your money! Watch out my friend..... Having said that: how would you suggest that Equity guarantees itself that the loans are paid back? Using friends (not casual acquintances or drinking buddies!!!) to guarantee a loan is the most effective collateral...it is better than attaching property. This is why micro-finance institutions and SACCOs have unusually high repayment rates (up to 99.5%). The members guarantee one another...and equity is using the same model...BTW,Equity has the lowest non-performing loan portfolio in Kenya (as a percentage of total loans). All said and done; one has to think very hard before borrowing from any bank anywhere in the world. Especially if you are borrowing for non-essential items (TVs,Fridges,personal cars etc....) Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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