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Law Capping interest rates
Rank: Elder Joined: 7/21/2010 Posts: 6,183 Location: nairobi
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MaichBlack wrote:mlennyma wrote:MaichBlack wrote:Quote:When doctors are summoned to court to give expert evidence in a case, they will be paid Sh50,000 by the law firms. Sounds too high to me!!! My questions: 1) Does it apply to doctors in government hospitals??? 2) Who pays in case of a criminal case? Like in the numerous cases where minors are raped in informal settlements, who is expected to pick the bill?? somebody is about to say we share equally all income generated by different Kenyans monthly Hapo ndipo tumeelekea!!! Someone will say it is "immoral" for @mlennyma to have a fridge full of foodstuff and kids having eggs, sausages, bacon etc. while other Kenyans have nothing to eat. And why do you need two cars and there is a certain neighbourhood drunk who can use one as a taxi - the days he is sober!  "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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MaichBlack wrote:mlennyma wrote:MaichBlack wrote:Quote:When doctors are summoned to court to give expert evidence in a case, they will be paid Sh50,000 by the law firms. Sounds too high to me!!! My questions: 1) Does it apply to doctors in government hospitals??? 2) Who pays in case of a criminal case? Like in the numerous cases where minors are raped in informal settlements, who is expected to pick the bill?? somebody is about to say we share equally all income generated by different Kenyans monthly Hapo ndipo tumeelekea!!! Someone will say it is "immoral" for @mlennyma to have a fridge full of foodstuff and kids having eggs, sausages, bacon etc. for breakfast while other Kenyans have nothing to eat. And why do you need two cars and there is a certain neighbourhood drunk who can use one as a taxi - the days he is sober! ALL governments are distributive which means socialist/ communist. That is why they tax the rich to spend on the welfare of the poor - education, health, security. Life is short. Live passionately.
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Rank: Member Joined: 9/11/2014 Posts: 228 Location: Nairobi
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Angelica _ann wrote:maka wrote:Obi 1 Kanobi wrote:MaichBlack wrote:obiero wrote:Angelica _ann wrote:DtheK wrote:Our Saccos operate on this model,lending at about 12% and paying around 7% for deposits.The better managed ones thrive and have grown year on year.CFC is already offering 7% on savings accounts with deposit above 5,000.00 and they are doing fine.
If M.Pigs want to bring down cost of credit they should try pushing the government to better use tools it has in its control I'm thinking expanding youth fund,SME and women fund and stopping their looting.
And what about implementing that mobile-based system treasury was going to borrow through?
Don't forget whose family owns M-shwari/C.B.A, do you seriously expect that person to cap interest rates?I would be pleasantly surprised. I thought it was proved here on wazua that Sacco loans are more expensive than bank loans. So they are also equally exploiting Kenyans!!! Yes. It was deliberated and decided @Angelica_ann, @Obiero - Some of these fellows cannot be helped. They can't even figure out that of the loan they get from the Sacco, a third is already their own money but they still pay interest for it! How did I miss that argument, Sacco loans pay very good interest on deposits, makes up for the interest they charge. I am in a Sacco that charges interest @1% per month reducing balance and and have been paying on average interest/dividend of minimum 10% over the last 5 years. You can borrow 3 times your deposits and they don't charge processing fee or any other handling fees like the Usurious Kenyan banks. They have close to zero bad debts coz all loans must have guarantors. Sacco loans are way more cheaper than bank loans, and even more accessible. http://www.wazua.co.ke/f...spx?g=posts&t=33423
@Obi there you are. Thanks @Maka @Angelica, I have scanned that thread today since this question keeps popping up frequently on Wazua and it is almost as I expected: the proofs (especially from anti-SACCO brigade) are carefully manipulated to support their argument of choice. The annual dividends are either not considered or put at 6% whereas the (rather large) SACCOs I know well have been giving between 10.5% and 11.5% for the longest time. And for those who think the interest is flat rate, it is not: I think only some Chamas still charge flat rate interest. For the 1M under discussion, redo the math with 330,000 earning annual dividend of 11% over 4 years with the remaining 670,000 being charged 12% reducing balance over the same period. I doubt it comes to the overall rate of 20% that gets quoted.
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Rank: Elder Joined: 11/5/2010 Posts: 2,459
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Let's all take time to read the op-ed article by governor Njoroge. Link below. http://www.theeastafrica...em-1-m8jvmcz/index.html
We know uhuru won't sign the bill but we can assume KBA will have to demonstrate a genuine interest to reduce the interest spread. In the article, the governor calls it a down payment which must be paid now.
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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iris wrote:Angelica _ann wrote:maka wrote:Obi 1 Kanobi wrote:MaichBlack wrote:obiero wrote:Angelica _ann wrote:DtheK wrote:Our Saccos operate on this model,lending at about 12% and paying around 7% for deposits.The better managed ones thrive and have grown year on year.CFC is already offering 7% on savings accounts with deposit above 5,000.00 and they are doing fine.
If M.Pigs want to bring down cost of credit they should try pushing the government to better use tools it has in its control I'm thinking expanding youth fund,SME and women fund and stopping their looting.
And what about implementing that mobile-based system treasury was going to borrow through?
Don't forget whose family owns M-shwari/C.B.A, do you seriously expect that person to cap interest rates?I would be pleasantly surprised. I thought it was proved here on wazua that Sacco loans are more expensive than bank loans. So they are also equally exploiting Kenyans!!! Yes. It was deliberated and decided @Angelica_ann, @Obiero - Some of these fellows cannot be helped. They can't even figure out that of the loan they get from the Sacco, a third is already their own money but they still pay interest for it! How did I miss that argument, Sacco loans pay very good interest on deposits, makes up for the interest they charge. I am in a Sacco that charges interest @1% per month reducing balance and and have been paying on average interest/dividend of minimum 10% over the last 5 years. You can borrow 3 times your deposits and they don't charge processing fee or any other handling fees like the Usurious Kenyan banks. They have close to zero bad debts coz all loans must have guarantors. Sacco loans are way more cheaper than bank loans, and even more accessible. http://www.wazua.co.ke/f...spx?g=posts&t=33423
@Obi there you are. Thanks @Maka @Angelica, I have scanned that thread today since this question keeps popping up frequently on Wazua and it is almost as I expected: the proofs (especially from anti-SACCO brigade) are carefully manipulated to support their argument of choice. The annual dividends are either not considered or put at 6% whereas the (rather large) SACCOs I know well have been giving between 10.5% and 11.5% for the longest time. And for those who think the interest is flat rate, it is not: I think only some Chamas still charge flat rate interest. For the 1M under discussion, redo the math with 330,000 earning annual dividend of 11% over 4 years with the remaining 670,000 being charged 12% reducing balance over the same period. I doubt it comes to the overall rate of 20% that gets quoted. Now this was the missing part of puzzle iv been looking for and found it 1 If I make a member deposit of 1m in 2015 Jan ,I'll expect a dividend of 110,000 in Dec 2015. 2 If I take a loan of 1m in 2016 IL be expected to pay an interest of 120,000 by Dec 2016 3 if I choose to tell them to use my dividend of last year 2015 (110,000) to pay my interest this year (120,000) ,all I'll do is make additional 10,000(roughly 900 sh every month) to take care of interest. 4 how can I compare this with a bank loan of 1,000,000 where each year the interest will be pegged at 20% each year meaning I'll pay 200,000 this year,(different from sacco's 120,000), interest rate isn't pegged on political will of cbk or parliament or economy ? 5 after sweating the repayment if 4 yrs I would have paid a total interest of roughly 400,000 to sacco (12% of 1m X 4yrs) reducing balance in comparison to banks 800,000 (20% of 1m X 4yrs) 6 after those 4 yrs I will still have my seed with sacco of 1m while the bank I would have paid more by 400,000 and no seed deposit to earn me interest of 11% 5 downside of sacco is raising member contribution (in my case 1M Previous year 2015) and finding guarantors. 6 if I know I have a project coming in 2017 I'd rather deposit money in sacco of 1m 2016 and take a loan with sacco than deal with banks rate of 20-30% currently This is just my thoughts
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Rank: Elder Joined: 7/22/2009 Posts: 7,452
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FRM2011 wrote:Let's all take time to read the op-ed article by governor Njoroge. Link below. http://www.theeastafrica...em-1-m8jvmcz/index.html
We know uhuru won't sign the bill but we can assume KBA will have to demonstrate a genuine interest to reduce the interest spread. In the article, the governor calls it a down payment which must be paid now. Quote:However, CBK has also argued that capping interest rates will have overwhelmingly negative consequences on businesses and consumers. This is confirmed by experiences from other countries, including in the EAC countries which have all abandoned interest rate caps, and Kenya’s own experience that led to eliminating interest rate controls in July 1991.
Reinstating interest rate caps will lead to the emergence of credit rationing and the unavailability of credit to a wide segment of the population—particularly SMEs, new and small borrowers—with immediate adverse consequences on job creation and poverty. Those are the words of the Governor of Central Bank Dr. Patrick Njoroge. And that is what we have been saying all along. But I guess the fellows commenting to the contrary know better than the Governor. Never mind his Ivy League education and extensive experience. Link: To the first page.Just in case you were not aware!!!Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Elder Joined: 3/18/2011 Posts: 12,069 Location: Kianjokoma
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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If its capped. Banks will not lend to any risky borrower, kicking out majority of Wanjiku to the Shylocks. The banking industy will shrink, jobs will go away..catastrophe on the way "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: 6/23/2009 Posts: 13,501 Location: nairobi
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murchr wrote:If its capped. Banks will not lend to any risky borrower, kicking out majority of Wanjiku to the Shylocks. The banking industy will shrink, jobs will go away..catastrophe on the way The risky borrowers even as at now can hardly get bankrolled
HF 30,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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Rank: Member Joined: 7/8/2013 Posts: 126
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obiero wrote:murchr wrote:If its capped. Banks will not lend to any risky borrower, kicking out majority of Wanjiku to the Shylocks. The banking industry will shrink, jobs will go away..catastrophe on the way The risky borrowers even as at now can hardly get bankrolled We are assuming that there are non-risky borrowers who are currently not getting loans and when the law comes in force then is when they will start getting. The fact is that it is those risky borrowers that contribute more than 75% of profits for most banks. Only a few can survive without them. Question is, are new non-risky borrowers going to just drop from heaven
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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omhangla wrote:obiero wrote:murchr wrote:If its capped. Banks will not lend to any risky borrower, kicking out majority of Wanjiku to the Shylocks. The banking industry will shrink, jobs will go away..catastrophe on the way The risky borrowers even as at now can hardly get bankrolled We are assuming that there are non-risky borrowers who are currently not getting loans and when the law comes in force then is when they will start getting. The fact is that it is those risky borrowers that contribute more than 75% of profits for most banks. Only a few can survive without them. Question is, are new non-risky borrowers going to just drop from heaven The non risky borrowers are already getting loans at a cheaper cost. The risky borrowers will simply be rejected. And the money invested elsewhere. "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: 7/22/2009 Posts: 7,452
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murchr wrote:omhangla wrote:obiero wrote:murchr wrote:If its capped. Banks will not lend to any risky borrower, kicking out majority of Wanjiku to the Shylocks. The banking industry will shrink, jobs will go away..catastrophe on the way The risky borrowers even as at now can hardly get bankrolled We are assuming that there are non-risky borrowers who are currently not getting loans and when the law comes in force then is when they will start getting. The fact is that it is those risky borrowers that contribute more than 75% of profits for most banks. Only a few can survive without them. Question is, are new non-risky borrowers going to just drop from heaven The non risky borrowers are already getting loans at a cheaper cost. The risky borrowers will simply be rejected. And the money invested elsewhere. @murchr - I think it is time we gave up. This issue has be explained over and over and people just refuse to get it. People need to know that you cannot run an economy emotionally. The first thing people should interrogate is why Kenya abandoned interest rate controls in 1991. And why other East African countries also did the same. Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Elder Joined: 3/19/2010 Posts: 3,504 Location: Uganda
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enyands wrote:iris wrote:Angelica _ann wrote:maka wrote:Obi 1 Kanobi wrote:MaichBlack wrote:obiero wrote:Angelica _ann wrote:DtheK wrote:Our Saccos operate on this model,lending at about 12% and paying around 7% for deposits.The better managed ones thrive and have grown year on year.CFC is already offering 7% on savings accounts with deposit above 5,000.00 and they are doing fine.
If M.Pigs want to bring down cost of credit they should try pushing the government to better use tools it has in its control I'm thinking expanding youth fund,SME and women fund and stopping their looting.
And what about implementing that mobile-based system treasury was going to borrow through?
Don't forget whose family owns M-shwari/C.B.A, do you seriously expect that person to cap interest rates?I would be pleasantly surprised. I thought it was proved here on wazua that Sacco loans are more expensive than bank loans. So they are also equally exploiting Kenyans!!! Yes. It was deliberated and decided @Angelica_ann, @Obiero - Some of these fellows cannot be helped. They can't even figure out that of the loan they get from the Sacco, a third is already their own money but they still pay interest for it! How did I miss that argument, Sacco loans pay very good interest on deposits, makes up for the interest they charge. I am in a Sacco that charges interest @1% per month reducing balance and and have been paying on average interest/dividend of minimum 10% over the last 5 years. You can borrow 3 times your deposits and they don't charge processing fee or any other handling fees like the Usurious Kenyan banks. They have close to zero bad debts coz all loans must have guarantors. Sacco loans are way more cheaper than bank loans, and even more accessible. http://www.wazua.co.ke/f...spx?g=posts&t=33423
@Obi there you are. Thanks @Maka @Angelica, I have scanned that thread today since this question keeps popping up frequently on Wazua and it is almost as I expected: the proofs (especially from anti-SACCO brigade) are carefully manipulated to support their argument of choice. The annual dividends are either not considered or put at 6% whereas the (rather large) SACCOs I know well have been giving between 10.5% and 11.5% for the longest time. And for those who think the interest is flat rate, it is not: I think only some Chamas still charge flat rate interest. For the 1M under discussion, redo the math with 330,000 earning annual dividend of 11% over 4 years with the remaining 670,000 being charged 12% reducing balance over the same period. I doubt it comes to the overall rate of 20% that gets quoted. Now this was the missing part of puzzle iv been looking for and found it 1 If I make a member deposit of 1m in 2015 Jan ,I'll expect a dividend of 110,000 in Dec 2015. 2 If I take a loan of 1m in 2016 IL be expected to pay an interest of 120,000 by Dec 2016 3 if I choose to tell them to use my dividend of last year 2015 (110,000) to pay my interest this year (120,000) ,all I'll do is make additional 10,000(roughly 900 sh every month) to take care of interest. 4 how can I compare this with a bank loan of 1,000,000 where each year the interest will be pegged at 20% each year meaning I'll pay 200,000 this year,(different from sacco's 120,000), interest rate isn't pegged on political will of cbk or parliament or economy ? 5 after sweating the repayment if 4 yrs I would have paid a total interest of roughly 400,000 to sacco (12% of 1m X 4yrs) reducing balance in comparison to banks 800,000 (20% of 1m X 4yrs) 6 after those 4 yrs I will still have my seed with sacco of 1m while the bank I would have paid more by 400,000 and no seed deposit to earn me interest of 11% 5 downside of sacco is raising member contribution (in my case 1M Previous year 2015) and finding guarantors. 6 if I know I have a project coming in 2017 I'd rather deposit money in sacco of 1m 2016 and take a loan with sacco than deal with banks rate of 20-30% currently This is just my thoughts Welcome to Sacco home,good you have discovered the freedom from bank oppression. Saccos will hardly auction you should you face some financial turbulence, bank will skin you alive punda amecheka
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Rank: Veteran Joined: 11/15/2013 Posts: 1,977 Location: Here
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Wazua is a free repulic understanding each statement is key. http://wazua.co.ke/forum.aspx?g=posts&t=31478Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
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Rank: Elder Joined: 7/22/2009 Posts: 7,452
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enyands wrote:Now this was the missing part of puzzle iv been looking for and found it
1 If I make a member deposit of 1m in 2015 Jan ,I'll expect a dividend of 110,000 in Dec 2015.
2 If I take a loan of 1m in 2016 IL be expected to pay an interest of 120,000 by Dec 2016
3 if I choose to tell them to use my dividend of last year 2015 (110,000) to pay my interest this year (120,000) ,all I'll do is make additional 10,000(roughly 900 sh every month) to take care of interest.
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6 if I know I have a project coming in 2017 I'd rather deposit money in sacco of 1m 2016 and take a loan with sacco than deal with banks rate of 20-30% currently
This is just my thoughts Wonders never seize!!! Explain to me like a 3 year old, why would you want to take a loan of 1 million and pay ANY AMOUNT OF INTEREST while you have 1 million in the same entity. Why not simply withdraw your 1 million - FOR FREE!!?? Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Elder Joined: 7/22/2009 Posts: 7,452
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My friend @enyands, If you withdrew your 1 million, you would get your 1 million, your 110,000/= dividends and pay absolutely no interest. You can now understand why I am totally puzzled by approach/idea. Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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[quote=Boris Boyka]Wazua is a free repulic understanding each statement is key. http://wazua.co.ke/forum.aspx?g=posts&t=31478[/quote] Karibu back bb though your thread is long .don't know where to start from or where you Targetting
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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MaichBlack wrote:enyands wrote:Now this was the missing part of puzzle iv been looking for and found it
1 If I make a member deposit of 1m in 2015 Jan ,I'll expect a dividend of 110,000 in Dec 2015.
2 If I take a loan of 1m in 2016 IL be expected to pay an interest of 120,000 by Dec 2016
3 if I choose to tell them to use my dividend of last year 2015 (110,000) to pay my interest this year (120,000) ,all I'll do is make additional 10,000(roughly 900 sh every month) to take care of interest.
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6 if I know I have a project coming in 2017 I'd rather deposit money in sacco of 1m 2016 and take a loan with sacco than deal with banks rate of 20-30% currently
This is just my thoughts Wonders never seize!!! Explain to me like a 3 year old, why would you want to take a loan of 1 million and pay ANY AMOUNT OF INTEREST while you have 1 million in the same entity. Why not simply withdraw your 1 million - FOR FREE!!?? Well I want my 1m to remain there as a base if Incase I want 3m .you know you can get 3 times your deposit . The one million is just a hypethical example sir
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Rank: Elder Joined: 7/22/2009 Posts: 7,452
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enyands wrote:MaichBlack wrote:enyands wrote:Now this was the missing part of puzzle iv been looking for and found it
1 If I make a member deposit of 1m in 2015 Jan ,I'll expect a dividend of 110,000 in Dec 2015.
2 If I take a loan of 1m in 2016 IL be expected to pay an interest of 120,000 by Dec 2016
3 if I choose to tell them to use my dividend of last year 2015 (110,000) to pay my interest this year (120,000) ,all I'll do is make additional 10,000(roughly 900 sh every month) to take care of interest.
....
....
....
6 if I know I have a project coming in 2017 I'd rather deposit money in sacco of 1m 2016 and take a loan with sacco than deal with banks rate of 20-30% currently
This is just my thoughts Wonders never seize!!! Explain to me like a 3 year old, why would you want to take a loan of 1 million and pay ANY AMOUNT OF INTEREST while you have 1 million in the same entity. Why not simply withdraw your 1 million - FOR FREE!!?? Well I want my 1m to remain there as a base if Incase I want 3m .you know you can get 3 times your deposit . The one million is just a hypethical example sir But as per the example you are talking about getting 1 million while having a deposit of 1 million!! And in any case, you can get your 1 million, 110,000/= dividend and the monthly payments you would be making deposit them as savings. You would still be back at 1 million (savings) without paying any interest and having pocketed the dividends! Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Veteran Joined: 11/15/2013 Posts: 1,977 Location: Here
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@Maichblack there is this idea tha says you need at least 6 Months of your net income as back up somewhere(whether payslip or business or both), Do you believe in it? If so where have you or do you advice that cash to be put? Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
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