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Law Capping interest rates
Rank: Veteran Joined: 7/3/2007 Posts: 1,634
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aemathenge wrote:What would happen if the government were to borrow from Wanjiku directly, through mobile phone, completely by-passing the banking industry?
During the initial days of the HE Kibaki Era, the then Finance Minister, Mwiraria reduced government reliance on borrowing by accentuating tax collection.
He further reduced the amount of money banks had to deposit with Central Bank.
The result was that banks started hawking loans on street pavements, offices, and in the villages.
As such, should an initiative to convince the Class of 2013 Mpigs to do away with the Capping, why not by-pass banks altogether and instead borrow from Wanjiku directly.
Just a thought. Just a thought. It is a good thought. Two problems: 1. Kibaki did the right thing, but soon after the Garment started spending like a bunch of drunken sailors. It has not stopped since. 2. As for tax, the low hanging fruit (mostly catching crooks and forcing them to pay) has long been picked. Since then KRA has missed almost every target. 3. Reducing the reserve ratio will will not fly, not when Opus Dei stands between the Fiscal goal posts. One word: inflation 4. Borrowing directly from Wanjiku will become an important avenue for government borrowing one day. But not today. Pesa onge. 5. Uhuruto might do well to consider Diaspora bonds. After all Ethiopia used this avenue to great effect when lenders refused to finance their Millennium damn project. "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: 12/4/2009 Posts: 10,636 Location: NAIROBI
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Wakanyugi wrote:aemathenge wrote:What would happen if the government were to borrow from Wanjiku directly, through mobile phone, completely by-passing the banking industry?
During the initial days of the HE Kibaki Era, the then Finance Minister, Mwiraria reduced government reliance on borrowing by accentuating tax collection.
He further reduced the amount of money banks had to deposit with Central Bank.
The result was that banks started hawking loans on street pavements, offices, and in the villages.
As such, should an initiative to convince the Class of 2013 Mpigs to do away with the Capping, why not by-pass banks altogether and instead borrow from Wanjiku directly.
Just a thought. Just a thought. It is a good thought. Two problems: 1. Kibaki did the right thing, but soon after the Garment started spending like a bunch of drunken sailors. It has not stopped since. 2. As for tax, the low hanging fruit (mostly catching crooks and forcing them to pay) has long been picked. Since then KRA has missed almost every target. 3. Reducing the reserve ratio will will not fly, not when Opus Dei stands between the Fiscal goal posts. One word: inflation 4. Borrowing directly from Wanjiku will become an important avenue for government borrowing one day. But not today. Pesa onge. 5. Uhuruto might do well to consider Diaspora bonds. After all Ethiopia used this avenue to great effect when lenders refused to finance their Millennium damn project. The only way out for now is GoK to reduce it's spending by cost cutting measures so as to reduce the fiscal deficit. The exercise might be painful for about 2,3 or so years after which now proper policies can be put into place to have a better and sustainable growth of the economy without having to put an interest rates cap law. Diaspora bonds that will be adding more debt to our already unsustainable debt levels Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Veteran Joined: 7/3/2007 Posts: 1,634
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Ericsson wrote:Wakanyugi wrote:aemathenge wrote:What would happen if the government were to borrow from Wanjiku directly, through mobile phone, completely by-passing the banking industry?
During the initial days of the HE Kibaki Era, the then Finance Minister, Mwiraria reduced government reliance on borrowing by accentuating tax collection.
He further reduced the amount of money banks had to deposit with Central Bank.
The result was that banks started hawking loans on street pavements, offices, and in the villages.
As such, should an initiative to convince the Class of 2013 Mpigs to do away with the Capping, why not by-pass banks altogether and instead borrow from Wanjiku directly.
Just a thought. Just a thought. It is a good thought. Two problems: 1. Kibaki did the right thing, but soon after the Garment started spending like a bunch of drunken sailors. It has not stopped since. 2. As for tax, the low hanging fruit (mostly catching crooks and forcing them to pay) has long been picked. Since then KRA has missed almost every target. 3. Reducing the reserve ratio will will not fly, not when Opus Dei stands between the Fiscal goal posts. One word: inflation 4. Borrowing directly from Wanjiku will become an important avenue for government borrowing one day. But not today. Pesa onge. 5. Uhuruto might do well to consider Diaspora bonds. After all Ethiopia used this avenue to great effect when lenders refused to finance their Millennium damn project. The only way out for now is GoK to reduce it's spending by cost cutting measures so as to reduce the fiscal deficit. The exercise might be painful for about 2,3 or so years after which now proper policies can be put into place to have a better and sustainable growth of the economy without having to put an interest rates cap law. Diaspora bonds that will be adding more debt to our already unsustainable debt levels The problem is not actual borrowing per se. At 57% debt to GDP we are still in fairly good shape. The problem is borrowing locally, which pushes up interest rates and prices out Wanjiku. Diaspora bond is a good interim measure, especially if it can be denominated in local currency. Think of it as Eurobond without the attendant political noise or the currency risks. "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: 12/4/2009 Posts: 10,636 Location: NAIROBI
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Wakanyugi wrote:Ericsson wrote:Wakanyugi wrote:aemathenge wrote:What would happen if the government were to borrow from Wanjiku directly, through mobile phone, completely by-passing the banking industry?
During the initial days of the HE Kibaki Era, the then Finance Minister, Mwiraria reduced government reliance on borrowing by accentuating tax collection.
He further reduced the amount of money banks had to deposit with Central Bank.
The result was that banks started hawking loans on street pavements, offices, and in the villages.
As such, should an initiative to convince the Class of 2013 Mpigs to do away with the Capping, why not by-pass banks altogether and instead borrow from Wanjiku directly.
Just a thought. Just a thought. It is a good thought. Two problems: 1. Kibaki did the right thing, but soon after the Garment started spending like a bunch of drunken sailors. It has not stopped since. 2. As for tax, the low hanging fruit (mostly catching crooks and forcing them to pay) has long been picked. Since then KRA has missed almost every target. 3. Reducing the reserve ratio will will not fly, not when Opus Dei stands between the Fiscal goal posts. One word: inflation 4. Borrowing directly from Wanjiku will become an important avenue for government borrowing one day. But not today. Pesa onge. 5. Uhuruto might do well to consider Diaspora bonds. After all Ethiopia used this avenue to great effect when lenders refused to finance their Millennium damn project. The only way out for now is GoK to reduce it's spending by cost cutting measures so as to reduce the fiscal deficit. The exercise might be painful for about 2,3 or so years after which now proper policies can be put into place to have a better and sustainable growth of the economy without having to put an interest rates cap law. Diaspora bonds that will be adding more debt to our already unsustainable debt levels The problem is not actual borrowing per se. At 57% debt to GDP we are still in fairly good shape. The problem is borrowing locally, which pushes up interest rates and prices out Wanjiku. Diaspora bond is a good interim measure, especially if it can be denominated in local currency. Think of it as Eurobond without the attendant political noise or the currency risks. 57% for a country like kenya is dangerous since our exports are weak. Our debt level is past 60% and I guess approaching towards 70% since the total debt has clocked sh.5 trillion Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Veteran Joined: 8/16/2009 Posts: 994
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aemathenge wrote:What would happen if the government were to borrow from Wanjiku directly, through mobile phone, completely by-passing the banking industry?
During the initial days of the HE Kibaki Era, the then Finance Minister, Mwiraria reduced government reliance on borrowing by accentuating tax collection.
He further reduced the amount of money banks had to deposit with Central Bank.
The result was that banks started hawking loans on street pavements, offices, and in the villages.
As such, should an initiative to convince the Class of 2013 Mpigs to do away with the Capping, why not by-pass banks altogether and instead borrow from Wanjiku directly.
Just a thought. Just a thought. This is already happening via M-Akiba. The only limitation is that Wanjiku is not liquid enough to take up the entire issues as demonstrated last year. GoK should continue doing this like in every quarter and slowly build up this financing avenue. 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: Veteran Joined: 8/16/2009 Posts: 994
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Ericsson wrote:Wakanyugi wrote:aemathenge wrote:What would happen if the government were to borrow from Wanjiku directly, through mobile phone, completely by-passing the banking industry?
During the initial days of the HE Kibaki Era, the then Finance Minister, Mwiraria reduced government reliance on borrowing by accentuating tax collection.
He further reduced the amount of money banks had to deposit with Central Bank.
The result was that banks started hawking loans on street pavements, offices, and in the villages.
As such, should an initiative to convince the Class of 2013 Mpigs to do away with the Capping, why not by-pass banks altogether and instead borrow from Wanjiku directly.
Just a thought. Just a thought. It is a good thought. Two problems: 1. Kibaki did the right thing, but soon after the Garment started spending like a bunch of drunken sailors. It has not stopped since. 2. As for tax, the low hanging fruit (mostly catching crooks and forcing them to pay) has long been picked. Since then KRA has missed almost every target. 3. Reducing the reserve ratio will will not fly, not when Opus Dei stands between the Fiscal goal posts. One word: inflation 4. Borrowing directly from Wanjiku will become an important avenue for government borrowing one day. But not today. Pesa onge. 5. Uhuruto might do well to consider Diaspora bonds. After all Ethiopia used this avenue to great effect when lenders refused to finance their Millennium damn project. The only way out for now is GoK to reduce it's spending by cost cutting measures so as to reduce the fiscal deficit. The exercise might be painful for about 2,3 or so years after which now proper policies can be put into place to have a better and sustainable growth of the economy without having to put an interest rates cap law. Diaspora bonds that will be adding more debt to our already unsustainable debt levels These are great points. However thinking like a politician, you will note that it takes 5 years to complete one term. Spending 2-3 years reducing debt via decreased development, lay offs on public sector and less support to parastatals will definately achive that. The only problem is that this will be unpopular to the electorate and your opponent will use this avenue to unsit you in next contest (unless you are in your final term). The new leader will then use the low debt base you created to borrow more and please the electorate with better infrastructure and public sector jobs and most definately earn a second term. That is why world over politicians prefer the adeage "kicking the can down the road". 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: 6/23/2009 Posts: 13,472 Location: nairobi
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Gatheuzi wrote:Ericsson wrote:Wakanyugi wrote:aemathenge wrote:What would happen if the government were to borrow from Wanjiku directly, through mobile phone, completely by-passing the banking industry?
During the initial days of the HE Kibaki Era, the then Finance Minister, Mwiraria reduced government reliance on borrowing by accentuating tax collection.
He further reduced the amount of money banks had to deposit with Central Bank.
The result was that banks started hawking loans on street pavements, offices, and in the villages.
As such, should an initiative to convince the Class of 2013 Mpigs to do away with the Capping, why not by-pass banks altogether and instead borrow from Wanjiku directly.
Just a thought. Just a thought. It is a good thought. Two problems: 1. Kibaki did the right thing, but soon after the Garment started spending like a bunch of drunken sailors. It has not stopped since. 2. As for tax, the low hanging fruit (mostly catching crooks and forcing them to pay) has long been picked. Since then KRA has missed almost every target. 3. Reducing the reserve ratio will will not fly, not when Opus Dei stands between the Fiscal goal posts. One word: inflation 4. Borrowing directly from Wanjiku will become an important avenue for government borrowing one day. But not today. Pesa onge. 5. Uhuruto might do well to consider Diaspora bonds. After all Ethiopia used this avenue to great effect when lenders refused to finance their Millennium damn project. The only way out for now is GoK to reduce it's spending by cost cutting measures so as to reduce the fiscal deficit. The exercise might be painful for about 2,3 or so years after which now proper policies can be put into place to have a better and sustainable growth of the economy without having to put an interest rates cap law. Diaspora bonds that will be adding more debt to our already unsustainable debt levels These are great points. However thinking like a politician, you will note that it takes 5 years to complete one term. Spending 2-3 years reducing debt via decreased development, lay offs on public sector and less support to parastatals will definately achive that. The only problem is that this will be unpopular to the electorate and your opponent will use this avenue to unsit you in next contest (unless you are in your final term). The new leader will then use the low debt base you created to borrow more and please the electorate with better infrastructure and public sector jobs and most definately earn a second term. That is why world over politicians prefer the adeage "kicking the can down the road". @Gatheuzi soo true, but this kind of can will not be kicked down any road, this government promised single digit lending and they have not delivered, though they have tried to bring the rates down.. By reversing the rate cap law, it would be a blot on the legacy of this regime. Why would we have total annual profit before tax in excess of KES 100B for the top six Kenyan banks in a struggling economy. Fact is, even with the rate cap, banks continue to post significant profits
HF 30,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 15,750 ABP 6.45
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Rank: Elder Joined: 12/4/2009 Posts: 10,636 Location: NAIROBI
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Gatheuzi wrote:Ericsson wrote:Wakanyugi wrote:aemathenge wrote:What would happen if the government were to borrow from Wanjiku directly, through mobile phone, completely by-passing the banking industry?
During the initial days of the HE Kibaki Era, the then Finance Minister, Mwiraria reduced government reliance on borrowing by accentuating tax collection.
He further reduced the amount of money banks had to deposit with Central Bank.
The result was that banks started hawking loans on street pavements, offices, and in the villages.
As such, should an initiative to convince the Class of 2013 Mpigs to do away with the Capping, why not by-pass banks altogether and instead borrow from Wanjiku directly.
Just a thought. Just a thought. It is a good thought. Two problems: 1. Kibaki did the right thing, but soon after the Garment started spending like a bunch of drunken sailors. It has not stopped since. 2. As for tax, the low hanging fruit (mostly catching crooks and forcing them to pay) has long been picked. Since then KRA has missed almost every target. 3. Reducing the reserve ratio will will not fly, not when Opus Dei stands between the Fiscal goal posts. One word: inflation 4. Borrowing directly from Wanjiku will become an important avenue for government borrowing one day. But not today. Pesa onge. 5. Uhuruto might do well to consider Diaspora bonds. After all Ethiopia used this avenue to great effect when lenders refused to finance their Millennium damn project. The only way out for now is GoK to reduce it's spending by cost cutting measures so as to reduce the fiscal deficit. The exercise might be painful for about 2,3 or so years after which now proper policies can be put into place to have a better and sustainable growth of the economy without having to put an interest rates cap law. Diaspora bonds that will be adding more debt to our already unsustainable debt levels These are great points. However thinking like a politician, you will note that it takes 5 years to complete one term. Spending 2-3 years reducing debt via decreased development, lay offs on public sector and less support to parastatals will definately achive that. The only problem is that this will be unpopular to the electorate and your opponent will use this avenue to unsit you in next contest (unless you are in your final term). Uko dunia gani,the incumbent is on his final termThe new leader will then use the low debt base you created to borrow more and please the electorate with better infrastructure and public sector jobs and most definately earn a second term. That is why world over politicians prefer the adeage "kicking the can down the road". Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Member Joined: 12/1/2007 Posts: 537 Location: Nakuru
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Gatheuzi wrote:aemathenge wrote:What would happen if the government were to borrow from Wanjiku directly, through mobile phone, completely by-passing the banking industry?
During the initial days of the HE Kibaki Era, the then Finance Minister, Mwiraria reduced government reliance on borrowing by accentuating tax collection.
He further reduced the amount of money banks had to deposit with Central Bank.
The result was that banks started hawking loans on street pavements, offices, and in the villages.
As such, should an initiative to convince the Class of 2013 Mpigs to do away with the Capping, why not by-pass banks altogether and instead borrow from Wanjiku directly.
Just a thought. Just a thought. This is already happening via M-Akiba. The only limitation is that Wanjiku is not liquid enough to take up the entire issues as demonstrated last year. GoK should continue doing this like in every quarter and slowly build up this financing avenue. And probably bump up the rate just above the risk free rate to attract investors For investors as a whole, returns decrease as motion increases ~ WB
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Rank: Veteran Joined: 8/16/2009 Posts: 994
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Ericsson wrote:Gatheuzi wrote:Ericsson wrote:Wakanyugi wrote:aemathenge wrote:What would happen if the government were to borrow from Wanjiku directly, through mobile phone, completely by-passing the banking industry?
During the initial days of the HE Kibaki Era, the then Finance Minister, Mwiraria reduced government reliance on borrowing by accentuating tax collection.
He further reduced the amount of money banks had to deposit with Central Bank.
The result was that banks started hawking loans on street pavements, offices, and in the villages.
As such, should an initiative to convince the Class of 2013 Mpigs to do away with the Capping, why not by-pass banks altogether and instead borrow from Wanjiku directly.
Just a thought. Just a thought. It is a good thought. Two problems: 1. Kibaki did the right thing, but soon after the Garment started spending like a bunch of drunken sailors. It has not stopped since. 2. As for tax, the low hanging fruit (mostly catching crooks and forcing them to pay) has long been picked. Since then KRA has missed almost every target. 3. Reducing the reserve ratio will will not fly, not when Opus Dei stands between the Fiscal goal posts. One word: inflation 4. Borrowing directly from Wanjiku will become an important avenue for government borrowing one day. But not today. Pesa onge. 5. Uhuruto might do well to consider Diaspora bonds. After all Ethiopia used this avenue to great effect when lenders refused to finance their Millennium damn project. The only way out for now is GoK to reduce it's spending by cost cutting measures so as to reduce the fiscal deficit. The exercise might be painful for about 2,3 or so years after which now proper policies can be put into place to have a better and sustainable growth of the economy without having to put an interest rates cap law. Diaspora bonds that will be adding more debt to our already unsustainable debt levels These are great points. However thinking like a politician, you will note that it takes 5 years to complete one term. Spending 2-3 years reducing debt via decreased development, lay offs on public sector and less support to parastatals will definately achive that. The only problem is that this will be unpopular to the electorate and your opponent will use this avenue to unsit you in next contest (unless you are in your final term). Uko dunia gani,the incumbent is on his final termThe new leader will then use the low debt base you created to borrow more and please the electorate with better infrastructure and public sector jobs and most definately earn a second term. That is why world over politicians prefer the adeage "kicking the can down the road". But his ticket must be handed to Arap Sigh intact. Sigh will only look good if he gives more free education, health cover to high school kids, free fertilizer etc. He will then have an easy run in 2022. 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: 12/4/2009 Posts: 10,636 Location: NAIROBI
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Gatheuzi wrote:Ericsson wrote:Gatheuzi wrote:Ericsson wrote:Wakanyugi wrote:aemathenge wrote:What would happen if the government were to borrow from Wanjiku directly, through mobile phone, completely by-passing the banking industry?
During the initial days of the HE Kibaki Era, the then Finance Minister, Mwiraria reduced government reliance on borrowing by accentuating tax collection.
He further reduced the amount of money banks had to deposit with Central Bank.
The result was that banks started hawking loans on street pavements, offices, and in the villages.
As such, should an initiative to convince the Class of 2013 Mpigs to do away with the Capping, why not by-pass banks altogether and instead borrow from Wanjiku directly.
Just a thought. Just a thought. It is a good thought. Two problems: 1. Kibaki did the right thing, but soon after the Garment started spending like a bunch of drunken sailors. It has not stopped since. 2. As for tax, the low hanging fruit (mostly catching crooks and forcing them to pay) has long been picked. Since then KRA has missed almost every target. 3. Reducing the reserve ratio will will not fly, not when Opus Dei stands between the Fiscal goal posts. One word: inflation 4. Borrowing directly from Wanjiku will become an important avenue for government borrowing one day. But not today. Pesa onge. 5. Uhuruto might do well to consider Diaspora bonds. After all Ethiopia used this avenue to great effect when lenders refused to finance their Millennium damn project. The only way out for now is GoK to reduce it's spending by cost cutting measures so as to reduce the fiscal deficit. The exercise might be painful for about 2,3 or so years after which now proper policies can be put into place to have a better and sustainable growth of the economy without having to put an interest rates cap law. Diaspora bonds that will be adding more debt to our already unsustainable debt levels These are great points. However thinking like a politician, you will note that it takes 5 years to complete one term. Spending 2-3 years reducing debt via decreased development, lay offs on public sector and less support to parastatals will definately achive that. The only problem is that this will be unpopular to the electorate and your opponent will use this avenue to unsit you in next contest (unless you are in your final term). Uko dunia gani,the incumbent is on his final termThe new leader will then use the low debt base you created to borrow more and please the electorate with better infrastructure and public sector jobs and most definately earn a second term. That is why world over politicians prefer the adeage "kicking the can down the road". But his ticket must be handed to Arap Sigh intact. Sigh will only look good if he gives more free education, health cover to high school kids, free fertilizer etc. He will then have an easy run in 2022. Do you think the incumbent will hand over the ticket to Arap Singh? Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 12/7/2012 Posts: 11,901
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Ericsson wrote:Gatheuzi wrote:Ericsson wrote:Gatheuzi wrote:Ericsson wrote:Wakanyugi wrote:aemathenge wrote:What would happen if the government were to borrow from Wanjiku directly, through mobile phone, completely by-passing the banking industry?
During the initial days of the HE Kibaki Era, the then Finance Minister, Mwiraria reduced government reliance on borrowing by accentuating tax collection.
He further reduced the amount of money banks had to deposit with Central Bank.
The result was that banks started hawking loans on street pavements, offices, and in the villages.
As such, should an initiative to convince the Class of 2013 Mpigs to do away with the Capping, why not by-pass banks altogether and instead borrow from Wanjiku directly.
Just a thought. Just a thought. It is a good thought. Two problems: 1. Kibaki did the right thing, but soon after the Garment started spending like a bunch of drunken sailors. It has not stopped since. 2. As for tax, the low hanging fruit (mostly catching crooks and forcing them to pay) has long been picked. Since then KRA has missed almost every target. 3. Reducing the reserve ratio will will not fly, not when Opus Dei stands between the Fiscal goal posts. One word: inflation 4. Borrowing directly from Wanjiku will become an important avenue for government borrowing one day. But not today. Pesa onge. 5. Uhuruto might do well to consider Diaspora bonds. After all Ethiopia used this avenue to great effect when lenders refused to finance their Millennium damn project. The only way out for now is GoK to reduce it's spending by cost cutting measures so as to reduce the fiscal deficit. The exercise might be painful for about 2,3 or so years after which now proper policies can be put into place to have a better and sustainable growth of the economy without having to put an interest rates cap law. Diaspora bonds that will be adding more debt to our already unsustainable debt levels These are great points. However thinking like a politician, you will note that it takes 5 years to complete one term. Spending 2-3 years reducing debt via decreased development, lay offs on public sector and less support to parastatals will definately achive that. The only problem is that this will be unpopular to the electorate and your opponent will use this avenue to unsit you in next contest (unless you are in your final term). Uko dunia gani,the incumbent is on his final termThe new leader will then use the low debt base you created to borrow more and please the electorate with better infrastructure and public sector jobs and most definately earn a second term. That is why world over politicians prefer the adeage "kicking the can down the road". But his ticket must be handed to Arap Sigh intact. Sigh will only look good if he gives more free education, health cover to high school kids, free fertilizer etc. He will then have an easy run in 2022. Do you think the incumbent will hand over the ticket to Arap Singh? He has to, no way out cc.@masukuma  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: 12/4/2009 Posts: 10,636 Location: NAIROBI
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Angelica _ann wrote:Ericsson wrote:Gatheuzi wrote:Ericsson wrote:Gatheuzi wrote:Ericsson wrote:Wakanyugi wrote:aemathenge wrote:What would happen if the government were to borrow from Wanjiku directly, through mobile phone, completely by-passing the banking industry?
During the initial days of the HE Kibaki Era, the then Finance Minister, Mwiraria reduced government reliance on borrowing by accentuating tax collection.
He further reduced the amount of money banks had to deposit with Central Bank.
The result was that banks started hawking loans on street pavements, offices, and in the villages.
As such, should an initiative to convince the Class of 2013 Mpigs to do away with the Capping, why not by-pass banks altogether and instead borrow from Wanjiku directly.
Just a thought. Just a thought. It is a good thought. Two problems: 1. Kibaki did the right thing, but soon after the Garment started spending like a bunch of drunken sailors. It has not stopped since. 2. As for tax, the low hanging fruit (mostly catching crooks and forcing them to pay) has long been picked. Since then KRA has missed almost every target. 3. Reducing the reserve ratio will will not fly, not when Opus Dei stands between the Fiscal goal posts. One word: inflation 4. Borrowing directly from Wanjiku will become an important avenue for government borrowing one day. But not today. Pesa onge. 5. Uhuruto might do well to consider Diaspora bonds. After all Ethiopia used this avenue to great effect when lenders refused to finance their Millennium damn project. The only way out for now is GoK to reduce it's spending by cost cutting measures so as to reduce the fiscal deficit. The exercise might be painful for about 2,3 or so years after which now proper policies can be put into place to have a better and sustainable growth of the economy without having to put an interest rates cap law. Diaspora bonds that will be adding more debt to our already unsustainable debt levels These are great points. However thinking like a politician, you will note that it takes 5 years to complete one term. Spending 2-3 years reducing debt via decreased development, lay offs on public sector and less support to parastatals will definately achive that. The only problem is that this will be unpopular to the electorate and your opponent will use this avenue to unsit you in next contest (unless you are in your final term). Uko dunia gani,the incumbent is on his final termThe new leader will then use the low debt base you created to borrow more and please the electorate with better infrastructure and public sector jobs and most definately earn a second term. That is why world over politicians prefer the adeage "kicking the can down the road". But his ticket must be handed to Arap Sigh intact. Sigh will only look good if he gives more free education, health cover to high school kids, free fertilizer etc. He will then have an easy run in 2022. Do you think the incumbent will hand over the ticket to Arap Singh? He has to, no way out cc.@masukuma That is when you will realise politics is a dirty game Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Veteran Joined: 10/29/2008 Posts: 1,566
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Gone/Obliterated by June; - www.nation.co.ke/busines...524006-o67bb5/index.htmlIsuni yilu yi maa me muyo - ni Mbisuu
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Rank: Elder Joined: 6/23/2009 Posts: 13,472 Location: nairobi
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June is weeks away. Meanwhile let me leave this here https://www.businessdail...6050-15rbv88z/index.html
HF 30,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 15,750 ABP 6.45
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Rank: Elder Joined: 6/23/2009 Posts: 13,472 Location: nairobi
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obiero wrote:actuarywahisa wrote:obiero wrote:obiero wrote:obiero wrote:obiero wrote:maka wrote:obiero wrote:Pesa Nane wrote:obiero wrote:maka wrote:Look at this;
This month the Central Bank of Kenya offered a 10 year Treasury Bond for a total amount of up to Kshs 25 Billion. The total number of bids received was 795 amounting to Kshs 26.31 Billion. The Weighted average rate for successful bids was 15.039%
Coupon 15.039% crazy...even after WHT its good cash I spoke to the president and his take was that the government shall pull down borrowing rates for itself, which is a good thing.. Expect government to obtain cheap credit. Watch the tbill rate slide down in coming months. We live in good times Congrats for speaking with @citizen001 but you should have asked him how the "government shall pull down borrowing rates for itself" when in fact we know the rates are market driven (through auctions) Beg to differ. The auctions are driven mainly by banks.. Now that banks are pushed to the wall on consumer lending, expect government to show a stiff hand Rates at the auction won't come down anytime soon....that 10 year was just a start. 91, 182, 364 day bills all down.. Expect the shorter tenor to hit 6.5% by December.. As per Graham's law, the bulls at the NSE must show up shortly.. http://www.businessdaily...4800-b0eb44z/index.html
Government stiff hand now visible with the last few failed auctions.. The NSE rally is nigh http://www.businessdaily...98768-c6waci/index.html
Since late 1800 Graham's law has never been found false. NSE index approaches 3,200 on a multi month rally http://www.businessdaily...21646-ywcses/index.html
Quote verbatim in today's daily "Government lending up.The CBK data also shows that while private sector credit growth has fallen, banks have significantly increased their lending to government. Credit to government grew 7.1 per cent on an annualised basis at the end of March, recovering from negative growth in the second half of 2016. Credit to other public sector borrowers such as parastatals and local (county) government units grew by 28.3 per cent in the period." Full link http://www.businessdaily...93596-jvq3rx/index.html
Obiero replies to Obiero who replied to Obiero who replied to Obiero who replied to Obiero who replied to Obiero who replied to ...guess who? You guessed it! .... Obiero! Baba hii mambo ya rate cap it seems you are enjoying a monologue.  Thanks for breaking the monologue.. Lol Here we are..
HF 30,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 15,750 ABP 6.45
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Rank: Elder Joined: 6/23/2009 Posts: 13,472 Location: nairobi
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obiero wrote:obiero wrote:Sidian, NBK, Family, HF, NIC struggling.. Small banks shall fold Family Bank et al in distress.. You know where you got the information first over a year ago In 2016, I chose to sit out financials where bank stocks nosedived sharply from end year 2016 to mid 2017, but have since regained steadily from Q3 2017. In 2018, only the big banks are showing signs of enjoying the rate cap fruits, primarily due to their deposit composition. It could be the right time to buy back into the tier one bank stocks
HF 30,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 15,750 ABP 6.45
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Rank: Elder Joined: 7/21/2010 Posts: 6,175 Location: nairobi
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obiero wrote:obiero wrote:obiero wrote:Sidian, NBK, Family, HF, NIC struggling.. Small banks shall fold Family Bank et al in distress.. You know where you got the information first over a year ago In 2016, I chose to sit out financials where bank stocks nosedived sharply from end year 2016 to mid 2017, but have since regained steadily from Q3 2017. In 2018, only the big banks are showing signs of enjoying the rate cap fruits, primarily due to their deposit composition. It could be the right time to buy back into the tier one bank stocks You have spoken,kcb,equity and nic are by bets with 100bob my exit targets ...the best thing in jubilee gvt you can't oppose what the top has decided to do ......byee rate cap "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Elder Joined: 7/21/2010 Posts: 6,175 Location: nairobi
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Dead,burial plans underway "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Elder Joined: 2/26/2012 Posts: 15,979
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mlennyma wrote:Dead,burial plans underway  "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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