Agreed.
Banks are only surviving because they have been allowed to relax accounting reporting...cook books.
The bad loan books must be staggering.
But they were given the greenlight to negotiate terms...and therefore reporting.
Exposure alone from Hotel and accommodation - must be close to 15-20% - and there things are elephant.
Will kenya gov default - domestic nope - they will force Opus dei to print money. Obviously tax collections have taken a hit - but also gov expenditure is low with less travel and usual recurrent nonsense.
External is where they badly need IMF and WB - and that is where things start becoming elephant.
The dollar is the problem - CBK was already fingered for manipulating it - if things goes south - it could get ugly very fast.
if KSH drop to 130-150 - gov will have to default on external debt. We will be back in 1993. Things could go ugly fast.
Don't keep any KShs in any bank. Buy assets.Keep dollars. Kshs will devalue for sometime. Full recovery will be 3yrs at best.
Uhuru has no sacred ground. Eti cannot default on domestic debt Suppliers have been wailing and gnashing ttheir teeth for years now.
Banks awash from deposits from where? Broke depositors took away their cash. The business are on deathbed. Parastatals are on overdrafts.
People are withdrawing even insurance policies and you expect banks to be awash with cash.
Top insurers confirmed a sharp rise in withdrawals and surrenders, majorly on life assurance and pension products — a trend linked to the coronavirus pandemic which has hurt many livelihoods through jobs losses and pay cuts.
Many policy holders are struggling to sustain payment of premiums while others are opting to use their contributions as collateral for loans as part of a race for survival.
https://www.businessdailyafrica.com/bd/economy/job-cuts-spark-insurance-policy-cash-withdrawals-2571996\
My take is that the banks have found a way of dribling past bookish Njoroge. Covid will eventually pull the rug out.
1. Highly unlikely government will default on domestic debt. The most likely option is that interest rates will shoot up reducing government appetite to borrow. But unfortunately banks are awash with deposits since private sector isn't borrowing, so government securities remains the only game in town.
2.Defaults on mobile loans shot up after covid 19 https://www.bloomberg.com/news/articles/2020-05-22/virus-swells-kenya-digital-loans-default-rate-to-23-in-april . Hustler economy depending on the definition is resilient cause it covers the basics which can't be avoided. Almost everyone now is in hustler economy(kadogo economy) including the big boys ( safaricom selling ksh.10 airtime), while middle class centered companies like java coffee collapse.
3. Kenya economy is in free fall no sector is thriving. The good thing is , people and businesses are being forced to reinvent, lower cost of production, change business models etc to survive, its from these ashes that new vibrant companies will emerge.