Salaried workers and owners of small businesses are headed for tough times after Equity Bank announced it is cutting down unsecured and micro loans to comply with a new set of global accounting rules on loan loss covers.
Equity group chief executive James Mwangi said the lender was moving away from unsecured and small business loans — which are deemed risky — ahead of the coming into force of the new guidelines, technically referred to as International Financial Reporting Standard (IFRS) 9.
From a layman’s point of view, I think Equity is doing what akina BBK and Stanchart did some 2 decades ago; Showed peasants the finger.
Asking. If an employee fails to pay the salary loans. Can the bank take his personal plot/house or car if they were not mentioned as colateral in the contract???
Other banks will follow suit. Two factors are at play here. The rate cap and the new accounting standard coming into effect on 1 Jan 2018
Very bad news for common guy. But I thought this is every bank’s cash cow.
Its unfortunate they forgot the same hand fed them few decades ago…
Fair enough, but why is the bank so fast to want to play by the rules when it was the first to break the tradition and as a result revolutionized banking in Kenya. I see this a betrayal to the masses who have placed the lender on the pedestal it sits on today.
Yes. Its a cash cow but banks have been told to expect higher provisions hence reduced profits. The only way out is for rate caps to be dropped
Someone tell them we gave up on banks long time ago. We have unsecured loans from saccos na hatusumbuangi.
Too sad I was expecting to get a loan next year after repaying the current one.
Yes, yo can use any possible avenue to recover what you are owed. watakujia mpaka ng’ombe zako.
Don’t blame them. They have been forced by circumstances. The credit crisis in US in 2008 brought massive changes the world over. Unless the rate cap is abolished other banks will follow suit.
:D:D:D:Dthat was funny
Then what is the point of insurance charges against the loan?
Mwenye shibe hajui mwenye njaa. They are forgetting to wipe their bottoms after using the bathroom. When they will stink in public, they will rush to get the TP but it will be over .
Stupid move !
Portfolio At risk are at an all time high lazima tu mitigate kiasi
Banks are thieves !
Good opportunity here for saccos Kwft momo rep @uwesmake uko na chance ya kununua bmwprado ingine soonest
Slowly but surely the banking industry will adjust itself. The core purpose of a financial institution is not to enrich itself and its Directors but to provide financial services. The Central Bank Governor even said as much. The industry is crowded and has become lazy i.e. relying on the same revenue streams and copy pasting products from one another. Reducing interest rates or caping them though not a proper solution it will however enable the Government to now focus more on other areas of the economy that need to be improved so that eventually the common citizen can afford basic needs, access affordable healthcare, self their produce and basically lead a fairly comfortable life.