Banking | - Part 105

Interest Rate Caps Boon for Big Kenyan Banks, Equity CEO Says

NAIROBI, Capital Markets in Africa: A decision to cap Kenyan interest rates may favor the biggest banks as small lenders will struggle to raise cheap deposits to fund lending, according to Equity Group Holdings Ltd. Chief Executive Officer James Mwangi. At least 30 of Kenya’s 42 lenders may have difficulty paying the minimum for deposits as demanded by a new law on interest rates that came into effect on Sept. 14. The legislation limits borrowing costs…

South Africa Bank That Gave Zuma Loan Says It Stuck to Rules

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Johannesburg, Capital Markets in Africa: A South African bank that gave President Jacob Zuma a mortgage to settle a Constitutional Court order to repay taxpayers the money spent on upgrading his residence said it sticks to loan processes no matter who the client is. “In granting a loan, the usual processes and conditions apply no matter who the client may be,” VBS Mutual Bank Chief Executive Officer Andile Ramavhunga said in an e-mailed statement on Wednesday. “VBS Mutual Bank…

Equity of Kenya Has 100 Billion Shillings to Help Double Loans

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NAIROBI, Capital Markets in Africa: Equity Group Holdings Ltd., Kenya’s biggest lender by market value, has as much as 100 billion shillings ($987.5 million) available for additional lending as it seeks to double business loans over the next three years, its directors said. With about 50 percent of the bank’s highest quality assets as a proportion of its cash outflows available, the lender has more than enough liquidity on hand for more loans, Chief Executive Officer James…

Kenyan Central Bank Sets CBR as the Base Rate for Loan Charges

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NAIROBI, Capital Market in Africa: Kenya’s central bank said lenders should peg their loans to its Central Bank Rate, or CBR, in line with a new law capping costs and as the International Monetary Fund warned that legislation limiting how much lenders charge for credit risks impeding access to loans. East Africa’s biggest economy has introduced restrictions on borrowing costs that set commercial rates at 400 basis points above a central bank base rate. Most…

Visa Introduces Mobile-Money Product to Rival Safaricom’s M-Pesa

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Johannesburg, Capital Markets in Africa: Visa Inc., the world’s largest payments network, introduced a mobile-phone application to enable cashless transactions in Kenya, where the majority of wireless payments are being done through the nation’s biggest telecommunications company, Safaricom Limited. The mVisa app will initially facilitate transactions for people with accounts in four banks, including KCB Group Ltd. and Co-operative Bank of Kenya Ltd., according to Visa Emerging Markets Senior Vice President Uttam Nayak. The company estimates 84 million of Africa’s mobile-phone…

Kenyan Treasury Secretary Says Banks Making Too Much

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NAIROBI, Capital Markets in Africa: Kenyan banks have been “expropriating too much profit” from the interest rates they charge on loans and have room to lower borrowing costs, Treasury Secretary Henry Rotich said. Lawmakers in East Africa’s biggest economy approved a bill last month that will limit the amount of interest banks can charge on loans to four percentage points above the central bank’s benchmark rate. The proposal is awaiting President Uhuru Kenyatta’s signature before it becomes law….

South Africa’s Rand Gains Offer South Africa’s Kganyago ‘Cushion’ on Rates

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South Africa, Capital Markets in Africa: The recent strength of South Africa’s rand is providing a cushion for the country’s policy makers and shouldn’t lead to complacency in tackling inflation, Reserve Bank Governor Lesetja Kganyago said. “The risks to the inflation outlook has to do with possible future weakness in the currency,” Kganyago told reporters at a central bank event in Pretoria on Thursday. “The fact that the currency has strengthened has not taken that way, it has…

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