tag:blogger.com,1999:blog-24178373.post4122798765151753878..comments2023-11-05T10:03:05.715+02:00Comments on pesa tu: pesa tuhttp://www.blogger.com/profile/13489188603541487272noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-24178373.post-43436464996317420732007-02-09T19:20:00.000+03:002007-02-09T19:20:00.000+03:00@CT: will elaborate further some other time@Banks:...@CT: will elaborate further some other time<BR/>@Banks: Thanks didnt knowpesa tuhttps://www.blogger.com/profile/13489188603541487272noreply@blogger.comtag:blogger.com,1999:blog-24178373.post-73529769951494027232007-02-07T14:52:00.000+03:002007-02-07T14:52:00.000+03:00You have uncovered the hidden side of foreign aid ...You have uncovered the hidden side of foreign aid - and we have to do as the IMF says. <br /><br />Changes were gazetted by the Minister in late January 2007bankelelehttps://www.blogger.com/profile/01180926084939364063noreply@blogger.comtag:blogger.com,1999:blog-24178373.post-79486145398892036332007-02-06T21:45:00.000+03:002007-02-06T21:45:00.000+03:00How?How?coldtuskerhttps://www.blogger.com/profile/05814806273605882544noreply@blogger.comtag:blogger.com,1999:blog-24178373.post-55121735432092013302007-02-05T14:20:00.000+03:002007-02-05T14:20:00.000+03:00Pole CT i;ve been busy.The Ammendment takes care o...Pole CT i;ve been busy.The Ammendment takes care of ur concerns.<br />Nope dont have scanning facilitiespesa tuhttps://www.blogger.com/profile/13489188603541487272noreply@blogger.comtag:blogger.com,1999:blog-24178373.post-31778354678877011382007-01-26T19:54:00.000+03:002007-01-26T19:54:00.000+03:00Pesa - Bwana... if you have free scanning faciliti...Pesa - Bwana... if you have free scanning facilities... can you scan the amendment in?<br /><br />The in-duplum rule provides leeway/incentive for a borrower to default.<br /><br />How will banks mitigate their risk for long-term lending?<br /><br />Example: A 20-year mortgage at 15% for KShs 10mn that goes 'bad' after 5 years. Assume that principal of 9mn is outstanding after 5 years.<br /><br />The foreclosure is tied up in court for additional 10 years. Remember this is Kenya! These cases can be delayed almost indefinitely.<br /><br />So the bank would have earned 9mn x 15% x 10 yrs = 13.5mn but can only recover 9mn+9mn = 18mn.<br /><br />In the meantime, inflation has eaten away at the 'real' value of the interest income over the 10 years (Time Value of Money).<br /><br />Furthermore, there are legal costs as well as personnel costs!<br /><br />This means a sane, risk-averse banker would lend for a MAXIMUM of 5 years. Then the borrower has to jump through the mortgage/loan hoops AGAIN.<br /><br />Or a Lender would ask for higher compensating balances (which wastes the Borrower's & Lender's resources ). To add insult to injury, Lenders will ask for high up-front fees to further mitigate their potential losses.<br /><br />The genuine borrower will have to pay for others' mistakes/fraud.coldtuskerhttps://www.blogger.com/profile/05814806273605882544noreply@blogger.comtag:blogger.com,1999:blog-24178373.post-76840720551446993562007-01-25T20:52:00.000+03:002007-01-25T20:52:00.000+03:00Pesa-tu, when i said retrogrossive, I meant its a ...Pesa-tu, when i said retrogrossive, I meant its a backward way of dealing with the issue. Why? I have to confirm this, but I believe that you can't under the new IFRS accounting standards account for interest that you are unlikely to receive i.e.which would be the case with a loan gone bad.MainaThttps://www.blogger.com/profile/12266497232119983697noreply@blogger.comtag:blogger.com,1999:blog-24178373.post-15316296101091943802007-01-25T18:14:00.000+03:002007-01-25T18:14:00.000+03:00The other IMPORTANT thing is that the law is not y...The other IMPORTANT thing is that the law is not yet operational.It will only come into effect once the Minister Gazettes it.<br /><br />Probably to give CBK,Ministry of Finance to consult with the Banks.<br /><br />This law will prevent situations where u borrow Sh 5 million from a bank, your biz collapses and the bank asks Sh 20 million from you.pesa tuhttps://www.blogger.com/profile/13489188603541487272noreply@blogger.comtag:blogger.com,1999:blog-24178373.post-7281609379534912742007-01-25T18:10:00.000+03:002007-01-25T18:10:00.000+03:00The Ammendment can be obtained from the Government...The Ammendment can be obtained from the Government printer at Haille Sellassie, just before Neno evangelism centre.Call them(number is in the phone directory)<br />Its a supplement to the Kenya Gazette published on 7th January 2007.<br /><br />I dont know the price,mine was a complimentary copy.But shouldnt be more than sh 300pesa tuhttps://www.blogger.com/profile/13489188603541487272noreply@blogger.comtag:blogger.com,1999:blog-24178373.post-52662637962471417012007-01-25T18:07:00.000+03:002007-01-25T18:07:00.000+03:00@Everyone:The rule will not apply retrospectively....@Everyone:The rule will not apply retrospectively.THAT IS OLD LOANS WONT BE AFFECTED BY THE RULE.<br /><br />The in duplum rule only comes into effect once a loan goes bad not when its good(i.e. regularly serviced).<br />The rule doesnt limit the Interest chargeable on loans it only limits what can be recovered from you in case of default.<br />For example, if u borrow sh 1 milion at 20% interest per annum. The rule means that if u default the total amount recoverable from you(defaulter) is sh 2 million i.e. double the Principal loan of sh 1 million.<br />In NO WAY DOES IT LIMIT INTEREST CHARGEABLE ON LOANS.pesa tuhttps://www.blogger.com/profile/13489188603541487272noreply@blogger.comtag:blogger.com,1999:blog-24178373.post-33033094698305782272007-01-25T15:33:00.000+03:002007-01-25T15:33:00.000+03:00The in duplum rule, is retrogressive, especially w...The in duplum rule, is retrogressive, especially when you have the doublewhammy in Kenya of having issues with collateral and debt recovery being so difficult that we need specialist debt recovery companies.MainaThttps://www.blogger.com/profile/12266497232119983697noreply@blogger.comtag:blogger.com,1999:blog-24178373.post-64128910702289430332007-01-24T18:56:00.000+03:002007-01-24T18:56:00.000+03:00Where can I get a copy of the Amendment?
Do we do...Where can I get a copy of the Amendment?<br /><br />Do we do to the IMF in all they say?<br />Should we do everything the IMF says?<br /><br />The in-duplum is a BAD idea. Banks should be encouraged to lend long-term e.g. 15 yrs. So a modest 7% for 15 years = 105%<br /><br />If Kenya Govt pays 12%+ for AAA T-Bonds, why would banks lend for any less considering the risks?<br /><br />Banks will revert to loans for a MAX of 5 years (15% x 5 = 75%). To preserve their rights, they will immediately put a borrower in default instead of 'working out' the situation.<br /><br />Why? The In-duplum rule prevents any sane banker from helping a lender extend the loan!!! There is no benefit to the Banker!coldtuskerhttps://www.blogger.com/profile/05814806273605882544noreply@blogger.com