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Law Capping interest rates
Rank: Elder Joined: 10/18/2008 Posts: 3,434 Location: Kerugoya
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On 27th August 2017, Dominic Omondi published a long, mostly incoherent, and error infested article in the Sub Standard. It caught my attention due to the title he opted to give it: WHAT INVESTORS DON'T UNDERSTAND ABOUT KENYA'S MIDDLE CLASSSource LINK:Personally, I believe a more fitting title would have been: Why Kenians Are Not Shopping For Cars In New Car ShowroomsHe did, however, raise a few issues regarding the interest rate cap. Could someone help me understand what he means by the assertion quoted below? Indulge me if you would. Quote:But financial analysts such as (Corporate Finance Manager at ABC Capital Johnson) Nderi insist that with heightened regulations against lenders
- the latest being a new financial reporting standard that requires lenders to provision for loans based on predicted losses –
borrowers will be (are being) ultra-vetted for their ability to repay.
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Rank: Veteran Joined: 7/5/2010 Posts: 2,061 Location: Nairobi
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aemathenge wrote:On 27th August 2017, Dominic Omondi published a long, mostly incoherent, and error infested article in the Sub Standard. It caught my attention due to the title he opted to give it: WHAT INVESTORS DON'T UNDERSTAND ABOUT KENYA'S MIDDLE CLASSSource LINK:Personally, I believe a more fitting title would have been: Why Kenians Are Not Shopping For Cars In New Car ShowroomsHe did, however, raise a few issues regarding the interest rate cap. Could someone help me understand what he means by the assertion quoted below? Indulge me if you would. Quote:But financial analysts such as (Corporate Finance Manager at ABC Capital Johnson) Nderi insist that with heightened regulations against lenders
- the latest being a new financial reporting standard that requires lenders to provision for loans based on predicted losses –
borrowers will be (are being) ultra-vetted for their ability to repay. The new standard is more stringent on the recognition and reporting of bad debts...right now banks are holding on and still reporting lots of loans that are not serviced regularly as potential interest earners..not with the new standard, such will go to the write off territory. It will hit P/Ls badly. Caveat: I explained the 'common man -g gist of it' that came away from the winded technical version from an expert. I could be off the mark, I am sure a wazuan expert will climb down from the mists of a hangover and do a better job 
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Rank: Member Joined: 12/17/2016 Posts: 225
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aemathenge wrote:On 27th August 2017, Dominic Omondi published a long, mostly incoherent, and error infested article in the Sub Standard. It caught my attention due to the title he opted to give it: WHAT INVESTORS DON'T UNDERSTAND ABOUT KENYA'S MIDDLE CLASSSource LINK:Personally, I believe a more fitting title would have been: Why Kenians Are Not Shopping For Cars In New Car ShowroomsHe did, however, raise a few issues regarding the interest rate cap. Could someone help me understand what he means by the assertion quoted below? Indulge me if you would. Quote:But financial analysts such as (Corporate Finance Manager at ABC Capital Johnson) Nderi insist that with heightened regulations against lenders
- the latest being a new financial reporting standard that requires lenders to provision for loans based on predicted losses –
borrowers will be (are being) ultra-vetted for their ability to repay. Excuse my ignorance; aren't these vehicles a collateral and this loan therefore qualifies as secured loan? Reflection Eternal
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Rank: Member Joined: 12/1/2007 Posts: 539 Location: Nakuru
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Flo-ology wrote:aemathenge wrote:On 27th August 2017, Dominic Omondi published a long, mostly incoherent, and error infested article in the Sub Standard. It caught my attention due to the title he opted to give it: WHAT INVESTORS DON'T UNDERSTAND ABOUT KENYA'S MIDDLE CLASSSource LINK:Personally, I believe a more fitting title would have been: Why Kenians Are Not Shopping For Cars In New Car ShowroomsHe did, however, raise a few issues regarding the interest rate cap. Could someone help me understand what he means by the assertion quoted below? Indulge me if you would. Quote:But financial analysts such as (Corporate Finance Manager at ABC Capital Johnson) Nderi insist that with heightened regulations against lenders
- the latest being a new financial reporting standard that requires lenders to provision for loans based on predicted losses –
borrowers will be (are being) ultra-vetted for their ability to repay. Excuse my ignorance; aren't these vehicles a collateral and this loan therefore qualifies as secured loan? Not all the loans have the cars as collateral. Sometimes the car you are buying is in Japan by the time you are applying for the loan. For investors as a whole, returns decrease as motion increases ~ WB
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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winmak wrote:Flo-ology wrote:aemathenge wrote:On 27th August 2017, Dominic Omondi published a long, mostly incoherent, and error infested article in the Sub Standard. It caught my attention due to the title he opted to give it: WHAT INVESTORS DON'T UNDERSTAND ABOUT KENYA'S MIDDLE CLASSSource LINK:Personally, I believe a more fitting title would have been: Why Kenians Are Not Shopping For Cars In New Car ShowroomsHe did, however, raise a few issues regarding the interest rate cap. Could someone help me understand what he means by the assertion quoted below? Indulge me if you would. Quote:But financial analysts such as (Corporate Finance Manager at ABC Capital Johnson) Nderi insist that with heightened regulations against lenders
- the latest being a new financial reporting standard that requires lenders to provision for loans based on predicted losses –
borrowers will be (are being) ultra-vetted for their ability to repay. Excuse my ignorance; aren't these vehicles a collateral and this loan therefore qualifies as secured loan? Not all the loans have the cars as collateral. Sometimes the car you are buying is in Japan by the time you are applying for the loan. Most of them have the cars as collateral... possunt quia posse videntur
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Rank: Member Joined: 12/17/2016 Posts: 225
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maka wrote:winmak wrote:Flo-ology wrote:aemathenge wrote:On 27th August 2017, Dominic Omondi published a long, mostly incoherent, and error infested article in the Sub Standard. It caught my attention due to the title he opted to give it: WHAT INVESTORS DON'T UNDERSTAND ABOUT KENYA'S MIDDLE CLASSSource LINK:Personally, I believe a more fitting title would have been: Why Kenians Are Not Shopping For Cars In New Car ShowroomsHe did, however, raise a few issues regarding the interest rate cap. Could someone help me understand what he means by the assertion quoted below? Indulge me if you would. Quote:But financial analysts such as (Corporate Finance Manager at ABC Capital Johnson) Nderi insist that with heightened regulations against lenders
- the latest being a new financial reporting standard that requires lenders to provision for loans based on predicted losses –
borrowers will be (are being) ultra-vetted for their ability to repay. Excuse my ignorance; aren't these vehicles a collateral and this loan therefore qualifies as secured loan? Not all the loans have the cars as collateral. Sometimes the car you are buying is in Japan by the time you are applying for the loan. Most of them have the cars as collateral... Exactly my point. This article claiming that car sale is low because bank has refused to finance purchases/loans is misplaced. My bank keeps on sending emails on car asset finance. It is now a norm for individuals and business to blame everything on rate-cap. Reflection Eternal
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Rank: Elder Joined: 6/23/2009 Posts: 13,506 Location: nairobi
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More distress for the small and now even the medium banks http://www.businessdaily...74558-ivexjbz/index.html
HF 30,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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Rank: Elder Joined: 12/4/2009 Posts: 10,684 Location: NAIROBI
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In 2016, mortgage loan accounts decreased by 1.5 percent from 24,458 to 24,085 after commercial banks tightened credit standards while the average mortgage size increased by 9% from KShs. 8.3 million in 2015 to KShs. 9.1 million in 2016 as a result of increasing property prices. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Member Joined: 7/8/2013 Posts: 126
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SCB sets aside 10b for unsecured lending. anyone applied for this?
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Rank: Member Joined: 12/1/2007 Posts: 539 Location: Nakuru
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omhangla wrote:SCB sets aside 10b for unsecured lending. anyone applied for this? Positioning for Members fallout now that JM is pulling the plug on salary loans For investors as a whole, returns decrease as motion increases ~ WB
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Rank: Elder Joined: 12/4/2009 Posts: 10,684 Location: NAIROBI
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https://www.standardmedi...-on-loans-to-be-reversedWealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Member Joined: 10/26/2015 Posts: 151
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winmak wrote:omhangla wrote:SCB sets aside 10b for unsecured lending. anyone applied for this? Positioning for Members fallout now that JM is pulling the plug on salary loans I guess we'll be seeing more loans to TSC employees at SCB
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Rank: Veteran Joined: 10/29/2008 Posts: 1,566
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CBK Governor finally decides - off the window it has to goQuote:
“What needs to change is the discipline among lending institutions. They cannot go ahead setting interest rates the way they were doing before. And it is our job to deal with them in the context of that market discipline,” he said. Dr Njoroge said preliminary findings of a joint study with the Treasury on the impact of the rates capping on growth of credit had confirmed a negative impact.
“I think it is clear to us that this (rate cap) has been problematic in many ways. What I cannot tell you is the path going forward (and) how this will happen,” Dr Njoroge said.
“All I can tell you is that it is in our interest as a country. It is in our interest as a central bank to work to reverse these measures and go back to a regime where interest rates are freely determined, but in a disciplined environment, Dr Njoroge said.
Isuni yilu yi maa me muyo - ni Mbisuu
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Rank: Veteran Joined: 8/28/2015 Posts: 1,247
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Ngalaka wrote:CBK Governor finally decides - off the window it has to goQuote:
“What needs to change is the discipline among lending institutions. They cannot go ahead setting interest rates the way they were doing before. And it is our job to deal with them in the context of that market discipline,” he said. Dr Njoroge said preliminary findings of a joint study with the Treasury on the impact of the rates capping on growth of credit had confirmed a negative impact.
“I think it is clear to us that this (rate cap) has been problematic in many ways. What I cannot tell you is the path going forward (and) how this will happen,” Dr Njoroge said.
“All I can tell you is that it is in our interest as a country. It is in our interest as a central bank to work to reverse these measures and go back to a regime where interest rates are freely determined, but in a disciplined environment, Dr Njoroge said.
Watu wa mortgage, were is the choirmaster? Vindu ni vichenjaga  can't you start your chorus too!!!! ,Behold, a sower went forth to sow;....
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Rank: Veteran Joined: 8/16/2009 Posts: 994
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Banks get more agressive on reposessions. However getting buyers is an equally tough task for the auctioneers. link Time is money, so money is time. Money saved is time gained in reverse! Money stores your life’s energy. You expend your energy, get paid money, and store that money for a future purchase made in a currency.
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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Gatheuzi wrote:Banks get more agressive on reposessions. However getting buyers is an equally tough task for the auctioneers. link Things are not rosy at all... possunt quia posse videntur
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Rank: Elder Joined: 6/23/2009 Posts: 13,506 Location: nairobi
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maka wrote:Gatheuzi wrote:Banks get more agressive on reposessions. However getting buyers is an equally tough task for the auctioneers. link Things are not rosy at all... Things fall apart
HF 30,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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Rank: Veteran Joined: 11/13/2015 Posts: 1,590
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Gatheuzi wrote:Banks get more agressive on reposessions. However getting buyers is an equally tough task for the auctioneers. link Private sector recession public sector consumption... waiting for the shit to hit the fan  Wish our local media wrote such stories instead of the political crap
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Rank: Elder Joined: 6/23/2009 Posts: 13,506 Location: nairobi
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wukan wrote:Gatheuzi wrote:Banks get more agressive on reposessions. However getting buyers is an equally tough task for the auctioneers. link Private sector recession public sector consumption... waiting for the shit to hit the fan Wish our local media wrote such stories instead of the political crap All Kenyan banks to report continued reduction in profit going into full year. Q3 already reveals a terrible situation, led by HFCK with a 65% PBT tumble YoY, NBK 58% slide, and SCBK 30% down..
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: 9/14/2011 Posts: 834 Location: nairobi
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obiero wrote:wukan wrote:Gatheuzi wrote:Banks get more agressive on reposessions. However getting buyers is an equally tough task for the auctioneers. link Private sector recession public sector consumption... waiting for the shit to hit the fan Wish our local media wrote such stories instead of the political crap All Kenyan banks to report continued reduction in profit going into full year. Q3 already reveals a terrible situation, led by HFCK with a 65% PBT tumble YoY, NBK 58% slide, and SCBK 30% down.. if the rates cap had not been put in place, and the economy is evidently doing badly, i wonder if the banks would be worse off since they would have continued lending at high rates and people would still be borrowing more to keep afloat but that can only go on for so long. If the banks are doing this badly and yet they are earning alot from lending to the government at high rates, what if the lending to the government becomes not too attractive I wonder how HF will recover seeing that real estate is badly hit
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