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Law Capping interest rates
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KulaRaha
#901 Posted : Monday, September 05, 2016 9:02:52 AM
Rank: Elder

Joined: 7/26/2007
Posts: 6,514
obiero wrote:
KulaRaha wrote:
obiero wrote:
KulaRaha wrote:
CBK giving zero direction in this matter.

How can a 1 year loan and a 7 year loan both cost 14.5%?

Also, what is the formula to calculate CBR or is it an arbitrary rate?

The 14.5 percent is per annum.. Nothing confused about CBK on the matter


So yield curve is flat regardless of tenor?

Yes. It is, though on reducing balance. Plus the CBR is subject to fluctuations. So in year 1 one may pay 14.5 but in year 2 the same could change to 23 percent. It's now in the hands of government


How is CBR calculated?
Business opportunities are like buses,there's always another one coming
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sparkly
#902 Posted : Monday, September 05, 2016 9:27:51 AM
Rank: Elder

Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
KulaRaha wrote:
obiero wrote:
KulaRaha wrote:
obiero wrote:
KulaRaha wrote:
CBK giving zero direction in this matter.

How can a 1 year loan and a 7 year loan both cost 14.5%?

Also, what is the formula to calculate CBR or is it an arbitrary rate?

The 14.5 percent is per annum.. Nothing confused about CBK on the matter


So yield curve is flat regardless of tenor?

Yes. It is, though on reducing balance. Plus the CBR is subject to fluctuations. So in year 1 one may pay 14.5 but in year 2 the same could change to 23 percent. It's now in the hands of government


How is CBR calculated?


Policy issue. Fixed by CBK not calculated.
Life is short. Live passionately.
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KulaRaha
#903 Posted : Monday, September 05, 2016 9:38:30 AM
Rank: Elder

Joined: 7/26/2007
Posts: 6,514
sparkly wrote:
KulaRaha wrote:
obiero wrote:
KulaRaha wrote:
obiero wrote:
KulaRaha wrote:
CBK giving zero direction in this matter.

How can a 1 year loan and a 7 year loan both cost 14.5%?

Also, what is the formula to calculate CBR or is it an arbitrary rate?

The 14.5 percent is per annum.. Nothing confused about CBK on the matter


So yield curve is flat regardless of tenor?

Yes. It is, though on reducing balance. Plus the CBR is subject to fluctuations. So in year 1 one may pay 14.5 but in year 2 the same could change to 23 percent. It's now in the hands of government


How is CBR calculated?


Policy issue. Fixed by CBK not calculated.


How nice...can be set at any rate to push agendas....
Business opportunities are like buses,there's always another one coming
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maka
#904 Posted : Monday, September 05, 2016 9:47:11 AM
Rank: Elder

Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
obiero wrote:
KulaRaha wrote:
obiero wrote:
KulaRaha wrote:
CBK giving zero direction in this matter.

How can a 1 year loan and a 7 year loan both cost 14.5%?

Also, what is the formula to calculate CBR or is it an arbitrary rate?

The 14.5 percent is per annum.. Nothing confused about CBK on the matter


So yield curve is flat regardless of tenor?

Yes. It is, though on reducing balance. Ideally longer tenors should have higher rates but this shall be where banks will punish consumers by maxing all product lines at the very top. Plus the CBR is subject to fluctuations. So in year 1 one may pay 14.5 but in year 2 the same could change to 23 percent. It's now in the hands of government


Banks won't punish anyone....
possunt quia posse videntur
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obiero
#905 Posted : Monday, September 05, 2016 10:03:23 AM
Rank: Elder

Joined: 6/23/2009
Posts: 14,289
Location: nairobi
maka wrote:
obiero wrote:
KulaRaha wrote:
obiero wrote:
KulaRaha wrote:
CBK giving zero direction in this matter.

How can a 1 year loan and a 7 year loan both cost 14.5%?

Also, what is the formula to calculate CBR or is it an arbitrary rate?

The 14.5 percent is per annum.. Nothing confused about CBK on the matter


So yield curve is flat regardless of tenor?

Yes. It is, though on reducing balance. Ideally longer tenors should have higher rates but this shall be where banks will punish consumers by maxing all product lines at the very top. Plus the CBR is subject to fluctuations. So in year 1 one may pay 14.5 but in year 2 the same could change to 23 percent. It's now in the hands of government


Banks won't punish anyone....

How fair is it for a TSC worker to pay the same rate as a tenderpreneur. Banks to embrace the spirit of the law would need to charge lows of 12.5 percent to lower risk segments. Anything other than that shall be punishment of consumers
COOP, IMH, KEGN, KQ, MTNU
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mlennyma
#906 Posted : Monday, September 05, 2016 10:07:18 AM
Rank: Elder

Joined: 7/21/2010
Posts: 6,194
Location: nairobi
Kcb and equity have found a new trading range
"Don't let the fear of losing be greater than the excitement of winning."
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washiku
#907 Posted : Monday, September 05, 2016 11:45:20 AM
Rank: Chief

Joined: 5/9/2007
Posts: 13,095
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Obi 1 Kanobi
#908 Posted : Monday, September 05, 2016 11:53:45 AM
Rank: Elder

Joined: 7/23/2008
Posts: 3,017
obiero wrote:
maka wrote:
obiero wrote:
KulaRaha wrote:
obiero wrote:
KulaRaha wrote:
CBK giving zero direction in this matter.

How can a 1 year loan and a 7 year loan both cost 14.5%?

Also, what is the formula to calculate CBR or is it an arbitrary rate?

The 14.5 percent is per annum.. Nothing confused about CBK on the matter


So yield curve is flat regardless of tenor?

Yes. It is, though on reducing balance. Ideally longer tenors should have higher rates but this shall be where banks will punish consumers by maxing all product lines at the very top. Plus the CBR is subject to fluctuations. So in year 1 one may pay 14.5 but in year 2 the same could change to 23 percent. It's now in the hands of government


Banks won't punish anyone....

How fair is it for a TSC worker to pay the same rate as a tenderpreneur. Banks to embrace the spirit of the law would need to charge lows of 12.5 percent to lower risk segments. Anything other than that shall be punishment of consumers


Lets not confuse the rate ceiling with the rate, banks should even lend at the CBR rate of 10.5% if your credit rating is as good as GOK, or less if better than GOK
"The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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Impunity
#909 Posted : Monday, September 05, 2016 12:35:33 PM
Rank: Elder

Joined: 3/2/2009
Posts: 26,331
Location: Masada
obiero wrote:
KulaRaha wrote:
CBK giving zero direction in this matter.

How can a 1 year loan and a 7 year loan both cost 14.5%?

Also, what is the formula to calculate CBR or is it an arbitrary rate?

The 14.5 percent is per annum.. Nothing confused about CBK on the matter


In fact if the banks so wish, they can price the 1 year loan at 14.5% and the 7 year loan at 111%...who cares if they want some difference?

LOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOL
Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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newfarer
#910 Posted : Monday, September 05, 2016 2:39:33 PM
Rank: Elder

Joined: 3/19/2010
Posts: 3,505
Location: Uganda
washiku wrote:



Blackmail, Sawa let them pay the 7% on my Wanjiku deposits ,vampires
punda amecheka
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