By Macharia Wa Mwihaki
A BANK IS AN INSTITUTION THAT BORROWS TO LEND FURTHER.
With the signing of the bill, it has elicited serious emotions and opinions across with both political divides having something to say. Macharia is a long time Jubilee strategist. He posted on his social media platform what he thought of the bill.
“The bill that has just been signed means a few things:
– That no bank can charge a higher than 4% of the pre-set Central bank rate. If the rate by CBK is at 10%, financial institutions are obligated to charge at 14% per anum.
– That once you save your money in a financial institution, then they are obligated to pay at NOT LESS than 70% of the CBK preset rate. Say that if the rate id 10%, then they should pay you at least on an interest of 70% of the 10%.
-The said bill affects BOTH new and existing loans.
Critics say that the banks will not give loans to insecured clients and that gives the category of common mwananchi due to insurance and risk matters. My argument is that banking in the kenyan sector is a fizzle. Ita perfect competition. You miss a service in this door and you get it in the next door. They also the the high interest rates on Treasury Bills will kill the credit market for citizens. The controller is the same CBK. Expect very low domestic borrings and when available, at low rates.
More over, banks can not hide to the fact that financial liberalisation and the ease of credit existing is promoted by the higher interest rates. The 17% interest they have been charging over the CBR rate is immoral and exploitative. The bill has taken toll of financial deepening ( many banks) and the large profits the banks have been making.
Next is taking safaricom to its resting position on the calls per minute, their interest rates on MSWARI and we make it a capped market.
CONSUMER PROTECTION AT PLAY”
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