On Sun, Aug 30, 2009 at 9:10 PM, aki<aki275@googlemail.com> wrote:
Our economy encourages "matope tupu" schemes and a conman system in place to encourage theft and exploitation. Banks : Openly tell you deposit maximum interest rates @ 6% while borrowing loan rates @ 14-17%!!
giving loans is always a risky proposition for banks. this is nothing unique to kenya. i am sure if you look at average loan default rates in the recent past, they have perhaps been very high (economic downturn, post-election violence etc...) . if you are a low risk individual (e.g. someone with lots of property as collateral and a long and happy credit rating) - then the banks will probably lend you money at a much lower interest rate than the one mentioned above. otherwise, most people are gonna fall into the 'high risk lending category' -- where the bank rates you as probable defaulter and lends you money at a higher interest rate (i.e. the high risk --> high returns proposition).