Tuesday, February 5, 2008

Unsecured loans caution

Banks cautious about unsecured personal loans Print E-mail
Written by Allan Odhiambo
Mr. John Wanyela,
February 5, 2008:
Until late last year, the scramble for private households by banks seeking to maximise their earnings looked unstoppable.

With most middle-class private households seeking to share in the fortunes of economic take-off, banks and other financial institutions saw an opportunity to grow their revenue from lending schemes, mainly through credit facilities such as car loans and mortgages.

This rush translated into premium earnings for the lending institutions because credit terms handed to the households were at relatively higher interest rates than most business enterprises and companies would accept.

Central Bank of Kenya’s November monthly economic review shows that lending to domestic households remained the single largest segment with a share slot of 38.4 per cent worth about Sh27 billion as at September 2007 having grown by Sh7billion over the previous month.

But with the recent wave of violence triggered by the disputed December presidential election results, the future of this key revenue source for banks is now uncertain, with some analysts warning of a possible slowdown amid fears of bad debts should the standoff carry on longer.

Others, however, expressed optimism that the ongoing mediation talks led by former UN secretary-general Kofi Annan would provide a panacea to the turmoil and reverse gains in the sector, hence stalling any major slumps in domestic lending.

“While it is unlikely that banks will be aggressively seeking to grow their lending to domestic households in areas affected by the clashes, it is also very unlikely that they will be foreclosing on such facilities,” NIC Bank managing director James Macharia told Business Daily.

Thousands of households affected by the orgy of violence are seeking funds to reconstruct their lives, but the institutions have remained cautious about seizing such opportunities to generate revenue because of potential risks.

“It is difficult for the institutions right now because a lot will depend on what is going on on the political front, whether it is business as usual or business unusual. Everyone was so positive, but that has turned out to haunt us.

However, it could be too early to tell where things could be headed just yet,” John Wanyela, the executive director of the Kenya Bankers Association said.

Analysts said even as banks remained cautious on future lending to households, numerous measures are already underway to mitigate any possible effects of bad loans that may arise from the disbursements that had already been made before the turmoil set it.

“Banks are positively seeking ways to help customers go through this recovery phase, within the constraints of their own business requirements,” said Mr Wachira.

“How banks assist customers will vary on case by case basis. Such may include rescheduling of loans for longer terms or allowing a moratorium for the payment of principal and interest, enhancement of working capital facilities, conversion of foreign exchange loans to local currency.”

And even as the banks grapple with the dilemma over their lending schemes the State, through the Special Programmes ministry has since established a Sh1billion reconstruction fund to help all affected by the post-election turmoil.

Analysts say the disbursement through the State might be of major assistance especially to households that lost crucial documents such as national identification cards and land title deeds in the skirmishes.

Its mandatory that one produces an ID or other forms of documentation when transacting deals with the lending institutions.


Mishi said...

There are many types of personal loans available in the market. Its very important to examine all your options first before settling with your final choice. Thanks for the info :)

Anonymous said...

Unsecured loan is the best option for tenants as it does not acquire any property to pledge as the collateral.You can get an unsecured loans on the basis of your credit record and your potential to repay the amount of the loan.People with Bad credit record can also apply for the loan here with relatively higher interest rates.If you are in urgent need of money and do not have sufficient assets to put as collateral then an unsecured loan is the best option for you.

Anonymous said...

Unsecured loans offer an amount in the range of £1000-£25000 for their needs. No asset like a car or house is required to be pledged with the lender for the money. Therefore to prove credibility as a borrower, the borrower is required to fulfill certain requirements like regular employment, regular residence, age of over 18 years and a current bank account.

Anonymous said...

Individuals having adverse credit history can avail bad credit loans. Stiff competition in the market makes procuring these loans fast and easy. It is advised that an applicant should seek such loan through online procedure so as to get advance knowledge before making any loan deal.

90 Day Payday Loans said...

Technically, most lenders do actually offer a same day payday loan, but when they say same day, they are referring to a full 24 hour long stretch. for more information about 90 Day Payday Loans



smartbrains said...

It’s really great information according to me. Many types of loans available in the market. So care fully choose the types of loans who best for you. Thanks for share this information.

Moshe said...

Really useful blog.Good work keeping this updated! Secured personal loans Thanks a lot!

Secured Personal Loans said...

Nice, well written and informative post.Thanks for sharing!

Secured Personal Loans

Richa Sehgal said...

Bad credit loans are meant specifically for those who have bad credit history. They are special schemes under special terms and conditions.
unsecured bad credit loan

Loan Modification said...

This seems to be a great site which offers Legal Debt Solutions, Loan Modification Services, Loan Modification, Bankruptcy Attorney, Debt Negotiation Services, Loan Modification Process, loan modification testimonials, legal debt solutions, legal debt solutions law firm etc. and i would surely like to try their service...i had been relying on http://www.stopbanks.com earlier and they too offered good stuff.

Michael Lee said...

Very nice, well written and informative article. CreditAndMortgageIndex.com is a place that has been helping people with less than perfect credit obtain personal loans.

Bad Credit Personal Loans said...

Thank you so much for this post. It is very interesting to look at what is happening in the midst of the financial crisis around the world.

Bad Credit Personal Loans

Zee said...

Thank you for giving us a different perspective of the loan market in Kenya. Sometimes we don't think how others around the world are being effected. Very good, informative post. Keep the posts coming.

bad credit loans are for people with less than perfect credit. We can help them obtain personal loans either secured or unsecured.

bad credit loans

Bad Credit Resources said...

thanks for sharing this great post! very informative worth bookmarking for future resources.

Bad Credit Loans

Anonymous said...

Getting a loan is not a big issue nowadays but choosing the right lender is the place generally people make mistakes and also in taking the decision of which loan type should we consider before going for a loan suitable for you. If you need 5000 dollars now with bad credit. Instant credit loans us provide these personal loans. Apply now easily at online and get an instant approval. Bad credit personal loans guaranteed approval 5000 is the better choice for you.

David Monical said...

Hey nice article. Sometimes there are several things we need to be considered before going for loans. We need to take decisions much wiser. Don't let bad credit keep you away from getting the loan. Get Online loans for bad credit from Short term credits. Our online process is very quick and easy

cdiane said...


James Jhon said...

Nice post. I discover something much harder on different blogs everyday. It will always be stimulating to read content using their company writers and practice a little something from their website. I’d opt to use some with the content on my own blog whether or not you don’t mind. Natually I’ll offer you a link on your web weblog. Thank you for sharing. https://www.bridging-loan-co.uk/

George said...
This comment has been removed by the author.
George said...

Some really interesting info , well written and loosely user genial . https://www.loans-co.uk/

charlie puth puth said...

Nice web site! Better than others I have lately study addressing this particular. The layout is actually nice, thoughts if I copy this particular? Just kidding?-Thanks! California refinance quote

Park Wood said...

Dear Customers.

We invite you all to participate in our new business and project funding program, We are currently funding for Business start-up Business developments, Business acquisition Business expansion, Project funding and Working capital etc.

This Funding program allows a client to enjoy 3% low interest rate and payback period of 1 to 35 years. We can approve a loan/funding for up to $500,000,000.00 or more depending on the nature of business we are currently funding for and we satisfy our customers’ financial needs and help them succeed

Application Available
Apply via email: standardonlineinvestment@gmail.com