Parliament defy IMF and Banks - DOUBLE DOWN on the Interest Capping

[RV Pundit]

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https://www.standardmedia.co.ke/business/article/2001293137/victory-for-borrowers-as-mps-retain-law-on-rates

[gout]

Interesting way for Treasury to show the middle finger where it benefits while cozy with the same IMF as a godsent scapegoat with the fuel prices. You can't beat Mwafrika thugs!!

[hk]

So which is this bank that would lend to businesses and individuals at lower rate than government?

[RV Pundit]

90% of kenyan do not default so that huge segment that is as good as lending to treasury.Banks do not have to lend to risk customers and they have crb and other tools.

So which is this bank that would lend to businesses and individuals at lower rate than government?

[Georgesoros]

90% of kenyan do not default so that huge segment that is as good as lending to treasury.Banks do not have to lend to risk customers and they have crb and other tools.

So which is this bank that would lend to businesses and individuals at lower rate than government?

Its good politically, but it stagnates financing systems. Most MPigs don't have basic understanding of economics. Thats why they vote for capping rates.

[hk]

90% of kenyan do not default so that huge segment that is as good as lending to treasury.Banks do not have to lend to risk customers and they have crb and other tools.

There's no borrower in kenya who's less riskier than treasury. Government has failed miserably to lower interest rates using normal fiscal & monetary tools. Eventually the credit growth will turn negative which'll be disastrous for the economy. This will force treasury to swallow a bitter pill, its better to do the prudent thing now instead of later. Even after all the protest treasury, will still impose VAT on fuel starting September 1. So even the scrapping of rates is coming. 

[patel]

once you borrow as much as our illegitimate president has then you must do everything you can to defend the shilling. Hiyo VAT ya fuel icome speedi speedi 

[vooke]

90% of kenyan do not default so that huge segment that is as good as lending to treasury.Banks do not have to lend to risk customers and they have crb and other tools.

So which is this bank that would lend to businesses and individuals at lower rate than government?

The ratio of gross non-performing loans to gross loans increased from 10.66 percent in December 2017 to 11.81 percent in March 2018
https://www.centralbank.go.ke/uploads/banking_sector_reports/97419934_Credit%20Survey%20Report%20for%20the%20Quarter%20ended%20March%202018.pdf

Problem is to meet the 90% good you have to lend to everyone including the 12% who are bad. So if your interest is anything less than 12% then you are not in business. But his 12% is industry rate. Individual banks like KCB have a much lower rate

[RV Pundit]

They need to figure out how to weed those few in unsecured loans and provision for it.Banks are still making profit.

90% of kenyan do not default so that huge segment that is as good as lending to treasury.Banks do not have to lend to risk customers and they have crb and other tools.

So which is this bank that would lend to businesses and individuals at lower rate than government?

The ratio of gross non-performing loans to gross loans increased from 10.66 percent in December 2017 to 11.81 percent in March 2018
https://www.centralbank.go.ke/uploads/banking_sector_reports/97419934_Credit%20Survey%20Report%20for%20the%20Quarter%20ended%20March%202018.pdf

Problem is to meet the 90% good you have to lend to everyone including the 12% who are bad. So if your interest is anything less than 12% then you are not in business. But his 12% is industry rate. Individual banks like KCB have a much lower rate

[KenyanPlato]

The expert the expert

[hk]

They need to figure out how to weed those few in unsecured loans and provision for it.Banks are still making profit.

Of course the banks are making money hand over fist by loading on Tbills at 13% interest rate. Risk free. Check the latest banks earning reports.

[KenyanPlato]

Check cbk numbers on defaults. Most of Kenyan loans are not properly secured

[RV Pundit]

The problem is that banks will charge the same interest irrespective of risk or collatoral.if they were to have graduated interest regime nobody would complain but pricing interest at 20% for everyone is not helpful.

[gout]

The ignored bit about interest on deposits/savings is quite a game changers of this interest capping law especially for a society which we keep lamenting of poor saving culture. Saccos are doing well giving us 9-12%. As banks move away from brick and mortal model they need to be squeezed further- let the depositors get a pie of the super normal margins.

[RV Pundit]

Parliament also suspend vat on fuel.imf can go f themselves

[hk]

Parliament also suspend vat on fuel.imf can go f themselves

Parliament also didn't approve the housing fund. We'll see whether IMF will withdraw the $1.5b standby loan since there's no way treasury can cut the budget deficit.

[hk]

Parliament is on fire. Rejected Vat on fuel, housing fund, scrapping of interest rates and today robin hood tax https://www.the-star.co.ke/news/2018/08/30/mps-reject-tax-on-huge-cash-transfers_c1811155 . Parliament should also reject increased excise tax on mobile money transfer. Parliament is literally starving the beast. The only thing disagree with is maintaining of interest rates spread. This is unwittingly giving treasury cheap credit while crowding out private sector. Treasury will have to scale down the 2018 budget, or run a ridiculous 10% budget deficit.

[RV Pundit]

Duale is teaching some lessons.He has lets mps go rogue.

[patel]

where does this leave Jubilee 4 pillars? in uhuru's head? and how will Ruto campaign on jubilee development agenda after URP has sabotaged Jubilee 4 pillars?  seem like URP wing of jubilee is determined to bring down the government through economic collapse. the sooner uhuru listen to IMF the better.

Parliament is on fire. Rejected Vat on fuel, housing fund, scrapping of interest rates and today robin hood tax https://www.the-star.co.ke/news/2018/08/30/mps-reject-tax-on-huge-cash-transfers_c1811155 . Parliament should also reject increased excise tax on mobile money transfer. Parliament is literally starving the beast. The only thing disagree with is maintaining of interest rates spread. This is unwittingly giving treasury cheap credit while crowding out private sector. Treasury will have to scale down the 2018 budget, or run a ridiculous 10% budget deficit.

[Nefertiti]

Ruto needs Big 4 more than Uhuru. With the corruption skunk firmly clawed on his back he has nothing but "development" to offer.