I am Bank A, I am regulated to lend to individuals at 15% p.a. However, i can lend to the same individual at 5.5% per month in the name of (service charge). This individual has the ability to service both loans. But I know I will make 90% if I loan him (and people like him) via short term visive 15% via long term. As a business I will make it (legally) impossible for such an individual to get a long term loan, and make sure my bottom line is met. This is what is defined as PREDATORY lending. Making it “too easy” to access short (extremely expensive) but putting in so many red tapes to access “affordable” loans.
We cannot expect the financial institutions to be saints. It is the work of the government (using CBK) to enforce financial practices that will enhance growth of businesses in the country.
Lakini hapa ndio shida inaanza, there is serious conflict of interest. NCBA runs Mshwari and Fuliza, 2 of the country’s biggest short term lenders by far and who ironically is owned by the powers that be. And this, is why people from Central hate Uhuru today, because he has enabled predators and made the region (heavily dependent on credit to flourish) vulnerable.
Dumb it down. Sijakuelewa.
PPle from central? Aaaaaarg kila saa ni Central, Mt. Kenya…Agikuyu
kenyatta-crony-capitalism
Safaricom, KCB and NCBA have created the shylock pandemic and its victims are the small businessmen that are reliant on credit. The country cannot grow in this system but the powers that be are profiting from it therefore cannot stop it
I said the most affected, not the only ones affected.
This was a very good financial rant until it became tribal.
They are the most affected btw. They can articulate it well, unlike us who only use credit for lifestyle
unafikiria pokots huchukua izo short term loans? si wagikuyu ndo hufanya biashara? mtasaidika aje kama hamkubali nyinyi ndio mnaumia?
Of course it’s predatory lending invented by the Americans but how it’s applied is where it gets tricky. In the west particularly the US they like calling it credit card and the credit score, basically the system is designed to keep you on debt always - a rat race that you can never win especially because of how the media promotes consumerism (we spend on what we don’t need). Credit card companies know customers rarely understand how credit works an are short sighted - basically they see the interests rates are small not realising they are compounded monthly not annually. Additionally, they don’t realise once you’re hooked it’s almost impossible to get out. The same with fuliza. In turn the companies earn more from the interests.
Sometimes the best way to win a game is not to play it in the first place.
Pokot tuko financially independent banae … hapana tambua loan. Pokot tukiwa msoto nikuingia boma na kushika mbuzi, kondoo ama ngombe. Kikiumana nikuenda raid.
Everything on Kenyatalk is going to turn tribal till election hype dies down next year.