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Law Capping interest rates
Rank: Member Joined: 1/1/2011 Posts: 396
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Rank: Veteran Joined: 8/28/2015 Posts: 1,247
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jmbada wrote:The first big bank to break ranks....Stanchart offering to buy out loans at 11.5% U have to be efficient to survive. Enslaving others with inefficient systems won't work anymore. Smart brains leads always. ,Behold, a sower went forth to sow;....
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Rank: Elder Joined: 11/5/2010 Posts: 2,459
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jmbada wrote:The first big bank to break ranks....Stanchart offering to buy out loans at 11.5% There is such a huge opportunity for one bank or NBFI to take over the SME niche that has been completely starved of credit. Asset finance is almost impossible to get nowadays. Even the bank that became big through asset finance, NIC, have become too picky nowadays. Faulu microfinance is part of the UAP-Old Mutual group. They are not affected by the interest capping law as a NBFI. There are 1,000s of SMEs who can pay 19-21% comfortably if the credit was available. But Faulu has joined Equity, Coop, KCB, Family in denying credit to the SMEs. Pathetic strategy.
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Rank: Veteran Joined: 11/2/2006 Posts: 1,206 Location: Nairobi
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FRM2011 wrote:jmbada wrote:The first big bank to break ranks....Stanchart offering to buy out loans at 11.5% There is such a huge opportunity for one bank or NBFI to take over the SME niche that has been completely starved of credit. Asset finance is almost impossible to get nowadays. Even the bank that became big through asset finance, NIC, have become too picky nowadays. Faulu microfinance is part of the UAP-Old Mutual group. They are not affected by the interest capping law as a NBFI. There are 1,000s of SMEs who can pay 19-21% comfortably if the credit was available. But Faulu has joined Equity, Coop, KCB, Family in denying credit to the SMEs. Pathetic strategy. How do they lend at 19-21% with interest capping at 13%? Formally employed people often live their employers' dream & forget about their own.
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Rank: Elder Joined: 12/7/2012 Posts: 11,908
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bird_man wrote:FRM2011 wrote:jmbada wrote:The first big bank to break ranks....Stanchart offering to buy out loans at 11.5% There is such a huge opportunity for one bank or NBFI to take over the SME niche that has been completely starved of credit. Asset finance is almost impossible to get nowadays. Even the bank that became big through asset finance, NIC, have become too picky nowadays. Faulu microfinance is part of the UAP-Old Mutual group. They are not affected by the interest capping law as a NBFI. There are 1,000s of SMEs who can pay 19-21% comfortably if the credit was available. But Faulu has joined Equity, Coop, KCB, Family in denying credit to the SMEs. Pathetic strategy. How do they lend at 19-21% with interest capping at 13%? Faulu is a microfinance institution & therefore is not affected by the rate cap!!! 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: Veteran Joined: 11/13/2015 Posts: 1,589
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FRM2011 wrote:jmbada wrote:The first big bank to break ranks....Stanchart offering to buy out loans at 11.5% There is such a huge opportunity for one bank or NBFI to take over the SME niche that has been completely starved of credit. Asset finance is almost impossible to get nowadays. Even the bank that became big through asset finance, NIC, have become too picky nowadays. Faulu microfinance is part of the UAP-Old Mutual group. They are not affected by the interest capping law as a NBFI. There are 1,000s of SMEs who can pay 19-21% comfortably if the credit was available. But Faulu has joined Equity, Coop, KCB, Family in denying credit to the SMEs. Pathetic strategy. Return on capital vs return of capital. Banks and MFIs have to weigh the risk. Banks in Argentina have not been lending for 15 years now and they are ok. Let's say an SME took 10m loan for 5 years paying 227k per month then due to cut on consumer spending sales drop to 150k per month, a cut on interest rates to 11.5% wouldn't rescue the business. It only brings monthly payment down to 219K. The SME needs more of consumer spending not a cut in interest rates. Even if you cut the interest rate to zero the SME will still default on the principal. The SME owner will look at his monthly sales and scale down on his credit demand. You can read what @mnandii calls the social mood here on wazua where wazuans are more interested in discussing bizarre murders than MAkiba bond.
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Rank: Member Joined: 4/21/2015 Posts: 151
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jmbada wrote:The first big bank to break ranks....Stanchart offering to buy out loans at 11.5% Link?
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Rank: Elder Joined: 12/4/2009 Posts: 10,678 Location: NAIROBI
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AndyC wrote:jmbada wrote:The first big bank to break ranks....Stanchart offering to buy out loans at 11.5% Link? Tough Terms and conditions Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 12/7/2012 Posts: 11,908
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Ericsson wrote:AndyC wrote:jmbada wrote:The first big bank to break ranks....Stanchart offering to buy out loans at 11.5% Link? Tough Terms and conditions C&P here!!! 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: 12/7/2012 Posts: 11,908
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Let me leave this here, though this deal was doomed from the start...... https://www.google.com/a...-asAMP-6rbhej/index.htmlIn 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: 2/16/2007 Posts: 2,114
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One of them must be to open an account(salary) with them so that they can pay themselves first when installments are due... Ericsson wrote:AndyC wrote:jmbada wrote:The first big bank to break ranks....Stanchart offering to buy out loans at 11.5% Link? Tough Terms and conditions
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Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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[quote=Horton]Treasury once again proposes repealing of rate cap https://kenyanwallstreet...repealing-of-rate-caps/[/quote] BREAKING! High Court rules that law setting limits on bank interest rates (the rate capping law) unconstitutional. possunt quia posse videntur
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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Rank: Elder Joined: 7/21/2010 Posts: 6,183 Location: nairobi
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I will be in the market tomorrow buying kcb "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Member Joined: 4/21/2015 Posts: 151
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mlennyma wrote:I will be in the market tomorrow buying kcb They give us one year to adjust and hope legislation will be passed to repeal. This is so vague...can't they make a clear cut decision.
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Rank: Elder Joined: 12/4/2009 Posts: 10,678 Location: NAIROBI
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AndyC wrote:mlennyma wrote:I will be in the market tomorrow buying kcb They give us one year to adjust and hope legislation will be passed to repeal. This is so vague...can't they make a clear cut decision. Amazing what a timing.This has been done to satisfy IMF conditions for a bailout package. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Kenya court axes banking rates cap, suspends implementation for a year https://mobile.reuters.com/article/amp/af/idAFL8N2115OF
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Rank: Elder Joined: 7/23/2008 Posts: 3,017
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Sounds ridiculous to me, how is a commercial decision tied to the constitution? But this being Kenya, anything is a go. Really keen to see how banks will communicate decisions to adjust peoples rate up, due to risk. If one has been consistently paying, then obviously their risk was correctly priced, ama namna gani my friends. "The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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Obi 1 Kanobi wrote:Sounds ridiculous to me, how is a commercial decision tied to the constitution?
But this being Kenya, anything is a go.
Really keen to see how banks will communicate decisions to adjust peoples rate up, due to risk. If one has been consistently paying, then obviously their risk was correctly priced, ama namna gani my friends. Ruling has been set aside for 12 months to give the Mpigs time to formulate another law. "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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