Stop fear mongering, if you signed an agreement for a variable interest loan, why wont 14.5% apply? If they have been effecting the increase why not lower it now? People will go to court

Blackmail won't work. I had no intention of taking any of the above . But I will happily take my 7%

What you may not realize is that we are in the beginning of a credit crunch. If your employer was relying on overdraft facility to pay your salaries at the end of the month start negotiating with your landlord mapema mapema.

You are talking to Kenyans!

They don't realize until it is way past the event.

Of course by Kenyans I don't mean all. Just most.

so you mean Kenyan economy is controlled by banks only?

I call it cow shit

So the only employer in kenya is a bank? What if after i get laid off, i approach the bank for the 14.5% and i establish a business that can even create and absorb the jobs laid off?

I can even bet on this...within a 6 month timeframe, the market will stabilize

Wanjiku will get his loans at lower rate and deposit at favorable rate and banks will improvise to ensure moral profits are reported.

You @Maich & @Wukan are just scared, its okay to be scared but stop fearmongering.

The banks have big asset base that's why they declare huge profits (oooh and they need to considering those assets)...but i ask, how did they accumulate these assets? Is it not by charging exorbitant rates to Wanjiku

Banks behaving like high school students is a NO. they will not get their way

I was supporting them but now if they decide to not accept the deposits and loan to wanjiku, wanjiku will go to FOSA & saccos to deposit her cash and borrow from there

And that will be the rise of that sector....well until they decide to act like banks after say 20yrs from now.

so you mean Kenyan economy is controlled by banks only? No, but most employers bank their money in Kenyan banks and have access to credit/overdraft facilities. If these are denied...

I call it cow shit

So the only employer in kenya is a bank? What if after i get laid off, i approach the bank for the 14.5% and i establish a business that can even create and absorb the jobs laid off? Why do you think the only employer in Kenya is a bank? If you get laid off, you will not have access to any credit facility unless you see a shylock

I can even bet on this...within a 6 month timeframe, the market will stabilize

Wanjiku will get his loans at lower rate and deposit at favorable rate and banks will improvise to ensure moral profits are reported. From who?

You @Maich & @Wukan are just scared, its okay to be scared but stop fearmongering.

The banks have big asset base that's why they declare huge profits (oooh and they need to considering those assets)...but i ask, how did they accumulate these assets? Is it not by charging exorbitant rates to Wanjiku

Banks behaving like high school students is a NO. they will not get their way

I was supporting them but now if they decide to not accept the deposits and loan to wanjiku, wanjiku will go to FOSA & saccos to deposit her cash and borrow from there

And that will be the rise of that sector....well until they decide to act like banks after say 20yrs from now.

The more I think about this bill the more I like it.

Unlike many who post out of panic, my take is the banks will immediately start looking to shore up the lost earnings from high interest rates.

Bankers have been very lazy in the way they allocate their capital, they have been getting free money from wanjiku and lending to the govt, with the other bit lent to corporates they can and anything left lent to SME's and Wanjiku and margin spreads of over 18%. The expensive loans have been used to average up the interest return/sh at say 14%

This changes now, banks will want to maintain their current average interest income return per shilling atleast coz they have to pay higher interest expense. The best way to do this is to lend to wanjiku at CBR+4% and leave out the lending to govt which was at CBR-?%

The govt will therefore have to source for funds from elsewhere.

Great bill, everyone wins.