Saturday, May 31, 2008

DEBT CRISES IN KENYA?

"WHY KENYANS ARE DROWNING IN DEBT" screams last saturdays headline of The Daily Nation. The article goes on to chronicle the bad situation. A casual reader will be tempted to believe that we are in the middle of a debt crises a la sub-prime mortgages. I however think, what we have is the generally accepted industry standard levels of default, that is if you don't include those affected by the post election violence. I am yet to hear of a financial institution that has increased its bad loan provision by more than normal.
The article goes on to relate the unwillingness of insurance companies to compensate for post election loses with the prevailing default rate which is not necessarily true.

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