Wazua
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Investor
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Economy
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Law Capping interest rates
Rank: Veteran Joined: 8/11/2010 Posts: 1,011 Location: nairobi
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Am with them in NIC. Am surprised to see they are in HFCK
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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By the way, i havent seen where they say they are short on banks at short term.
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Rank: Elder Joined: 6/23/2009 Posts: 13,506 Location: nairobi
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mwekez@ji wrote:By the way, i havent seen where they say they are short on banks at short term. Neither have I
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: 6/23/2009 Posts: 13,506 Location: nairobi
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mwekez@ji wrote:Am with them in NIC. Am surprised to see they are in HFCK HF is worth the short term risk. With payment of the bond recently and prospects of rate cap repeal. It could reprice upwards
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: 12/7/2012 Posts: 11,908
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obiero wrote:mwekez@ji wrote:Am with them in NIC. Am surprised to see they are in HFCK HF is worth the short term risk. With payment of the bond recently and prospects of rate cap repeal. It could reprice upwards Waiting to see bank gains at NSE this week as reaction to the announcement!!! In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Member Joined: 5/2/2018 Posts: 267
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@Angelica_Ann Looks like NIC is responding....
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Rank: Veteran Joined: 11/13/2015 Posts: 1,590
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obiero wrote:wukan wrote:Ericsson wrote:jgithige wrote:obiero wrote:RIEK01 wrote:Robbery in the hood.. The repeal will cripple us. We better live with the current interest rates. Those who can qualify wapewe! Sisi wengine Mungu atatulinda Problem lies with unending appetite from our govt to borrow internally, they have crowded out the SMEs and to some extent corporate. Banks are enjoyin lendin to the risk free Govt. Interest capping would have worked if the govt was not a major player in domestic borrowing. Banks would be hawking their loans like jungu-karanga. True but interest rates cap law was not for the ordinary citizen. It was GOK to borrow more at cheap rates and waste more There is also a theory that the rate cap law was a bank bailout. @wukan explain with aid of a diagram Posting diagrams on wazua is like rocket science. Theory as explained to me (though must confess i was too drunk to follow the theory properly  )...governments fund bailouts in the short run by borrowing or issuing bonds,which are repaid by future taxation. If you look at the private sector credit growth was on a rapid decline before the rate cap. The decline was more pronounced after the collapse of Imperial, Chase bank there was a period of illiquidity. After rate cap private credit growth has stabilized. Kenya businesses are too reliant on banks for funding (above 90%) meaning banks were taking too high a risk in NPLs. To stabilize things GoK went on spending binge which banks funded at generous interest. Simply the taxpayers have funded a bailout through interest rates on bonds infusing capital into the banks. Notice there are no rights issues from the banks of late.
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Rank: Veteran Joined: 4/16/2014 Posts: 1,420 Location: Bohemian Grove
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wukan wrote:obiero wrote:wukan wrote:Ericsson wrote:jgithige wrote:obiero wrote:RIEK01 wrote:Robbery in the hood.. The repeal will cripple us. We better live with the current interest rates. Those who can qualify wapewe! Sisi wengine Mungu atatulinda Problem lies with unending appetite from our govt to borrow internally, they have crowded out the SMEs and to some extent corporate. Banks are enjoyin lendin to the risk free Govt. Interest capping would have worked if the govt was not a major player in domestic borrowing. Banks would be hawking their loans like jungu-karanga. True but interest rates cap law was not for the ordinary citizen. It was GOK to borrow more at cheap rates and waste more There is also a theory that the rate cap law was a bank bailout. @wukan explain with aid of a diagram Posting diagrams on wazua is like rocket science. Theory as explained to me (though must confess i was too drunk to follow the theory properly )...governments fund bailouts in the short run by borrowing or issuing bonds,which are repaid by future taxation. If you look at the private sector credit growth was on a rapid decline before the rate cap. The decline was more pronounced after the collapse of Imperial, Chase bank there was a period of illiquidity. After rate cap private credit growth has stabilized. Kenya businesses are too reliant on banks for funding (above 90%) meaning banks were taking too high a risk in NPLs. To stabilize things GoK went on spending binge which banks funded at generous interest. Simply the taxpayers have funded a bailout through interest rates on bonds infusing capital into the banks. Notice there are no rights issues from the banks of late. You can't do a rights issue in a depressed market so that wasnt an option anyway.
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Rank: Veteran Joined: 7/3/2007 Posts: 1,634
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wukan wrote:obiero wrote:wukan wrote:Ericsson wrote:jgithige wrote:obiero wrote:RIEK01 wrote:Robbery in the hood.. The repeal will cripple us. We better live with the current interest rates. Those who can qualify wapewe! Sisi wengine Mungu atatulinda Problem lies with unending appetite from our govt to borrow internally, they have crowded out the SMEs and to some extent corporate. Banks are enjoyin lendin to the risk free Govt. Interest capping would have worked if the govt was not a major player in domestic borrowing. Banks would be hawking their loans like jungu-karanga. True but interest rates cap law was not for the ordinary citizen. It was GOK to borrow more at cheap rates and waste more There is also a theory that the rate cap law was a bank bailout. @wukan explain with aid of a diagram Posting diagrams on wazua is like rocket science. Theory as explained to me (though must confess i was too drunk to follow the theory properly )...governments fund bailouts in the short run by borrowing or issuing bonds,which are repaid by future taxation. If you look at the private sector credit growth was on a rapid decline before the rate cap. The decline was more pronounced after the collapse of Imperial, Chase bank there was a period of illiquidity. After rate cap private credit growth has stabilized. Kenya businesses are too reliant on banks for funding (above 90%) meaning banks were taking too high a risk in NPLs. To stabilize things GoK went on spending binge which banks funded at generous interest. Simply the taxpayers have funded a bailout through interest rates on bonds infusing capital into the banks. Notice there are no rights issues from the banks of late. It sounds like your theorist was even more drunk than you were  Why all the complication if what was at stake was a bank bailout? Me I think the the cap turned out to be the essential kick in the pants that banks needed to reform. For the likes of Equity, KCB, Cooperative, repealing the cap is now icing on the cake, not an absolute necessity. The technology and process reforms they have made or accelerated have shown they can make money at 13% - of course government appetite has helped. As for Wanjiku, I maintain that we may have dodged a bullet. Most of those high risk loans that disappeared were middle class consumption debt that the nation can do without. What we need now is a law to tame those technology based Shylocks aka Mshwari, Tala, Branch that are fueling consumer borrowing by the very poor etc. As for the caps, keep them on for one more year and we shall see some serious consolidation in the banking sector. In fact with reduced government borrowing in the local market, we shall not hear of credit declines anymore. Banks will always lend money, otherwise what do they do with the loot? "The opposite of a correct statement is a false statement. But the opposite of a profound truth may well be another profound truth." (Niels Bohr)
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Rank: Elder Joined: 6/23/2009 Posts: 13,506 Location: nairobi
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Wakanyugi wrote:wukan wrote:obiero wrote:wukan wrote:Ericsson wrote:jgithige wrote:obiero wrote:RIEK01 wrote:Robbery in the hood.. The repeal will cripple us. We better live with the current interest rates. Those who can qualify wapewe! Sisi wengine Mungu atatulinda Problem lies with unending appetite from our govt to borrow internally, they have crowded out the SMEs and to some extent corporate. Banks are enjoyin lendin to the risk free Govt. Interest capping would have worked if the govt was not a major player in domestic borrowing. Banks would be hawking their loans like jungu-karanga. True but interest rates cap law was not for the ordinary citizen. It was GOK to borrow more at cheap rates and waste more There is also a theory that the rate cap law was a bank bailout. @wukan explain with aid of a diagram Posting diagrams on wazua is like rocket science. Theory as explained to me (though must confess i was too drunk to follow the theory properly )...governments fund bailouts in the short run by borrowing or issuing bonds,which are repaid by future taxation. If you look at the private sector credit growth was on a rapid decline before the rate cap. The decline was more pronounced after the collapse of Imperial, Chase bank there was a period of illiquidity. After rate cap private credit growth has stabilized. Kenya businesses are too reliant on banks for funding (above 90%) meaning banks were taking too high a risk in NPLs. To stabilize things GoK went on spending binge which banks funded at generous interest. Simply the taxpayers have funded a bailout through interest rates on bonds infusing capital into the banks. Notice there are no rights issues from the banks of late. It sounds like your theorist was even more drunk than you were Why all the complication if what was at stake was a bank bailout? Me I think the the cap turned out to be the essential kick in the pants that banks needed to reform. For the likes of Equity, KCB, Cooperative, repealing the cap is now icing on the cake, not an absolute necessity. The technology and process reforms they have made or accelerated have shown they can make money at 13% - of course government appetite has helped. As for Wanjiku, I maintain that we may have dodged a bullet. Most of those high risk loans that disappeared were middle class consumption debt that the nation can do without. What we need now is a law to tame those technology based Shylocks aka Mshwari, Tala, Branch that are fueling consumer borrowing by the very poor etc. As for the caps, keep them on for one more year and we shall see some serious consolidation in the banking sector. In fact with reduced government borrowing in the local market, we shall not hear of credit declines anymore. Banks will always lend money, otherwise what do they do with the loot? @Wakanyugi has a grasp on matters financial sector in KE. Catch industry heavyweights tonight on Fanaka TV 7-8pm discussing the rate cap
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: 7/3/2007 Posts: 1,634
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obiero wrote:Wakanyugi wrote:wukan wrote:obiero wrote:wukan wrote:Ericsson wrote:jgithige wrote:obiero wrote:RIEK01 wrote:Robbery in the hood.. The repeal will cripple us. We better live with the current interest rates. Those who can qualify wapewe! Sisi wengine Mungu atatulinda Problem lies with unending appetite from our govt to borrow internally, they have crowded out the SMEs and to some extent corporate. Banks are enjoyin lendin to the risk free Govt. Interest capping would have worked if the govt was not a major player in domestic borrowing. Banks would be hawking their loans like jungu-karanga. True but interest rates cap law was not for the ordinary citizen. It was GOK to borrow more at cheap rates and waste more There is also a theory that the rate cap law was a bank bailout. @wukan explain with aid of a diagram Posting diagrams on wazua is like rocket science. Theory as explained to me (though must confess i was too drunk to follow the theory properly )...governments fund bailouts in the short run by borrowing or issuing bonds,which are repaid by future taxation. If you look at the private sector credit growth was on a rapid decline before the rate cap. The decline was more pronounced after the collapse of Imperial, Chase bank there was a period of illiquidity. After rate cap private credit growth has stabilized. Kenya businesses are too reliant on banks for funding (above 90%) meaning banks were taking too high a risk in NPLs. To stabilize things GoK went on spending binge which banks funded at generous interest. Simply the taxpayers have funded a bailout through interest rates on bonds infusing capital into the banks. Notice there are no rights issues from the banks of late. It sounds like your theorist was even more drunk than you were Why all the complication if what was at stake was a bank bailout? Me I think the the cap turned out to be the essential kick in the pants that banks needed to reform. For the likes of Equity, KCB, Cooperative, repealing the cap is now icing on the cake, not an absolute necessity. The technology and process reforms they have made or accelerated have shown they can make money at 13% - of course government appetite has helped. As for Wanjiku, I maintain that we may have dodged a bullet. Most of those high risk loans that disappeared were middle class consumption debt that the nation can do without. What we need now is a law to tame those technology based Shylocks aka Mshwari, Tala, Branch that are fueling consumer borrowing by the very poor etc. As for the caps, keep them on for one more year and we shall see some serious consolidation in the banking sector. In fact with reduced government borrowing in the local market, we shall not hear of credit declines anymore. Banks will always lend money, otherwise what do they do with the loot? @Wakanyugi has a grasp on matters financial sector in KE. Catch industry heavyweights tonight on Fanaka TV 7-8pm discussing the rate cap Is Fanaka available on GoTV, Startimes or free to air? "The opposite of a correct statement is a false statement. But the opposite of a profound truth may well be another profound truth." (Niels Bohr)
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Rank: Elder Joined: 6/23/2009 Posts: 13,506 Location: nairobi
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Wakanyugi wrote:obiero wrote:Wakanyugi wrote:wukan wrote:obiero wrote:wukan wrote:Ericsson wrote:jgithige wrote:obiero wrote:RIEK01 wrote:Robbery in the hood.. The repeal will cripple us. We better live with the current interest rates. Those who can qualify wapewe! Sisi wengine Mungu atatulinda Problem lies with unending appetite from our govt to borrow internally, they have crowded out the SMEs and to some extent corporate. Banks are enjoyin lendin to the risk free Govt. Interest capping would have worked if the govt was not a major player in domestic borrowing. Banks would be hawking their loans like jungu-karanga. True but interest rates cap law was not for the ordinary citizen. It was GOK to borrow more at cheap rates and waste more There is also a theory that the rate cap law was a bank bailout. @wukan explain with aid of a diagram Posting diagrams on wazua is like rocket science. Theory as explained to me (though must confess i was too drunk to follow the theory properly )...governments fund bailouts in the short run by borrowing or issuing bonds,which are repaid by future taxation. If you look at the private sector credit growth was on a rapid decline before the rate cap. The decline was more pronounced after the collapse of Imperial, Chase bank there was a period of illiquidity. After rate cap private credit growth has stabilized. Kenya businesses are too reliant on banks for funding (above 90%) meaning banks were taking too high a risk in NPLs. To stabilize things GoK went on spending binge which banks funded at generous interest. Simply the taxpayers have funded a bailout through interest rates on bonds infusing capital into the banks. Notice there are no rights issues from the banks of late. It sounds like your theorist was even more drunk than you were Why all the complication if what was at stake was a bank bailout? Me I think the the cap turned out to be the essential kick in the pants that banks needed to reform. For the likes of Equity, KCB, Cooperative, repealing the cap is now icing on the cake, not an absolute necessity. The technology and process reforms they have made or accelerated have shown they can make money at 13% - of course government appetite has helped. As for Wanjiku, I maintain that we may have dodged a bullet. Most of those high risk loans that disappeared were middle class consumption debt that the nation can do without. What we need now is a law to tame those technology based Shylocks aka Mshwari, Tala, Branch that are fueling consumer borrowing by the very poor etc. As for the caps, keep them on for one more year and we shall see some serious consolidation in the banking sector. In fact with reduced government borrowing in the local market, we shall not hear of credit declines anymore. Banks will always lend money, otherwise what do they do with the loot? @Wakanyugi has a grasp on matters financial sector in KE. Catch industry heavyweights tonight on Fanaka TV 7-8pm discussing the rate cap Is Fanaka available on GoTV, Startimes or free to air? FTA PANG 178
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: 4/22/2010 Posts: 11,522 Location: Nairobi
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Rank: Elder Joined: 12/7/2012 Posts: 11,908
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maka wrote:https://youtu.be/iuCCepVr_Bs Thanks, Nice debate lakini WC In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Elder Joined: 6/23/2009 Posts: 13,506 Location: nairobi
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Angelica _ann wrote:maka wrote:https://youtu.be/iuCCepVr_Bs Thanks, Nice debate lakini WC Jude Njomo, the MP Who introduced the Interest Rate Cap Bill will be in attendance “Am not against banks making profits, but against banks making so much profit that the other businesses that borrow money from the banks don't make any profit” #InterestRateDebate
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: 6/23/2009 Posts: 13,506 Location: nairobi
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Jude Njomo, the brain behind the rate caps says: “Initially, credit was available but unaffordable. Today, credit is affordable but not available” #InterestRateDebate I will ensure that the rate cap is not repealed, via parliament https://www.standardmedi...repeal-interest-rate-law
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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obiero wrote:Jude Njomo, the brain behind the rate caps says: “Initially, credit was available but unaffordable. Today, credit is affordable but not available” #InterestRateDebate I will ensure that the rate cap is not repealed, via parliament https://www.standardmedi...epeal-interest-rate-law Frontier market paupers wait till October the IMF will be in town with the terms of surrender. Meanwhile Zambia is feeling the pain
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Rank: Member Joined: 12/11/2006 Posts: 884
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[quote=obiero]Jude Njomo, the brain behind the rate caps says: “Initially, credit was available but unaffordable. Today, credit is affordable but not available” #InterestRateDebate I will ensure that the rate cap is not repealed, via parliament https://www.standardmedi...epeal-interest-rate-law[/quote] That is what happens when the law of demand and supply is not followed. For electricity they say its better to have expensive power than have no power at all. Wonder whether this can also apply to credit. Would we rather have expensive credit or no credit at all. “Invest in yourself. Your career is the engine of your wealth.”
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Rank: Elder Joined: 7/21/2010 Posts: 6,183 Location: nairobi
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ngapat wrote:[quote=obiero]Jude Njomo, the brain behind the rate caps says: “Initially, credit was available but unaffordable. Today, credit is affordable but not available” #InterestRateDebate I will ensure that the rate cap is not repealed, via parliament https://www.standardmedi...epeal-interest-rate-law[/quote] That is what happens when the law of demand and supply is not followed. For electricity they say its better to have expensive power than have no power at all. Wonder whether this can also apply to credit. Would we rather have expensive credit or no credit at all. can this man use his salary to give cheap loans and stop this rubbish "Don't let the fear of losing be greater than the excitement of winning."
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Law Capping interest rates
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