On 6/2/11, aki <
aki275@gmail.com> wrote:
> @Phares, I spent the better part of last night looking into my question i.e
> why govts borrow from World Bank and not local banks and the nearest answers
> I came across is the fact that govts borrowing from the World Bank do so
> below market rates as the primary reason. While kenyans are supposed to
> borrow from commercial banks at 14%-19%, it is possible that the World Bank
> lends at 4%-7% to the kenyan govt and therefore opens the system to monetary
> manipulation. I had no idea this is how deep we would end up on a simple
> thread as this one.
>
> This is probably why you do not see the digitization project sponsered by
> Kenya Commercial Bank, Barclays, Stanbic and the rest. There is nothing
> stopping the govt from using local banks to setup the e-govt digitization
> projects. However, what has been clearly demontsrated by the KICTB ( not
> sure if they processed the digitization project ) is the complete lack of
> confidence in our BPO and developer/software local market. And this is
> exactly what I've been writing all along. As long as we have to "depend" on
> external loans, they will have pre-conditions that no company locally can
> fullfill. The only pre-conditions a local company can fullfil are e.g.
> supply of hardware.
>
> In closing, I still stand by my views that while WB/Google/KE e-govt is a
> good idea, let those who were involved never use the words like innovation
> to preach what can be done to develop a high tech sector. Maybe if we look
> closely at NASA, one may understand what we really want to do in terms of
> incubation, funds injections by govt, etc.
>
> So we are basically back to square one, which is : empty rhetoric, VCs can
> save us, Brokers from the WB and many others who are inter-connected. Why
> did the e-Govt not use the e-govt process to spur local growth of high tech
> companies?
>
>
>
>
>
>
> On Thu, Jun 2, 2011 at 7:38 AM, Phares Kariuki <
pkariuki@gmail.com> wrote:
>
>> @Aki
>>
>> Especially in an economy that's developing like ours, it's not prudent for
>> the government to take loans from the local banks. We have a shortage of
>> credit, if the government borrows it's more attractive than the mwananchi.
>> Reduce loans available to the citizen, and make it more expensive to get
>> the
>> same debt for both SME's and individuals...
>>
>> And the government does borrow from local banks, when it won't affect the
>> credit available to the nation. The reason mortgages etc are becoming more
>> pervasive is because the banks, to bolster their business are forced to
>> talk
>> to the individual. We now have banks offering pasha loans etc....
>>
>> At the end of the day, the Government borrowing from the local economy
>> stunts other sectors of the economy that depend on that credit.
>>
>> My problem with World Bank funding is not the funding itself, it's that
>> historically, the funds were misused....
>>
>>
>>
>>
>>
>