Connect with us

Business

KPA Will be Sold to the Chinese Government if Kenya Railways Defaults on SGR Loan

Published

on

Loading...

[ad_1]

The Kenya Ports Authority will be sold to the government of China if Kenya Railways Corporation defaults on her loans, the Auditor General’s report on the financial health of the institution has revealed.

KPA was used as a collateral and the government waived a sovereign immunity by signing an agreement that states that KPA’s revenues will be used to pay Kenya’s debt to China Exim Bank if the minimum volumes required for consignment are not met.

“The KPA assets are exposed since the Authority signed the agreement where it has been referred to as a borrower under clause 17.5 and any proceeding against its assets by the lender would not be protected by sovereign immunity since the government waived the immunity on the Kenya Ports assets by signing the agreement,” read the expert opinion signed by FT Kimani on behalf of the Auditor General.

In case Kenya Railways fails to meet its debt obligations, China Exim Bank would become KPA’s principal holder if it exercises its power over the escrow account security.

Auditor General says the agreement is biased since any non-performance or dispute with the China Exim Bank would be referred to arbitration in China, whose fairness in resolving the dispute may not be guaranteed.

Loading...

Kenya borrowed $3.233 billion loan from China’s Exim Bank in May 2014, comprised of $1.633 billion commercial loan and $1.6 billion concessional, for its 385km Standard Gauge Railway.

The loan payment, whose interest is 3.6 percentage points above the six months average of London Inter Bank Offered Rate (Libor), will commence next year after a five-year grace period.

Kenya will pay Exim Bank of China Ksh34.8 billion in the financial year 2019/20 from Ksh6.07 billion this fiscal year, and Ksh8.39 billion in 2018-19.

Cumulatively, the government will spend Ksh82.85 billion in the year starting July next year to pay Chinese lenders compared to Ksh26.61 billion it paid in the current year ended June.

Already, KPA is one of the institutions identified by the Privatisation Commission to be sold as the government seeks to raise funds to support its budget.

Other state-owned corporations approved for sale are National Bank of Kenya, Consolidated Bank of Kenya, Kenya Meat Commission, Development Bank of Kenya, East African Portland Cement, Kengen, Kenya Pipeline Corporation, and five sugar millers — Chemilil, Sony, Nzoia, Miwani and Muhoroni.

 

[ad_2]

Loading...
Continue Reading

Business

World Bank pushes G-20 to extend debt relief to 2021

Published

on

Loading...

World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.

“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.

He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.

The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.

Loading...

People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.

For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.

Debt burdens, already unsustainable for many countries, are rising to crisis levels.

“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.

ALSO READ:Global Economy Plunges into Worst Recession – World Bank

Loading...
Continue Reading

Business

Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans

Published

on

Loading...

The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.

“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”

According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.

Loading...

Tighter Reins on Platforms for Mobile Loans

The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.

Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.

Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.

SEE ALSO: Central Bank Unveils Measures to Tame Unregulated Digital Lenders

Loading...
Continue Reading

Business

Scope Markets Kenya customers to have instant access to global financial markets

Published

on

Loading...

NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options. 

This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.

The Scope Markets app offers clients over 500 investment opportunities across global financial markets.

The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.

The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).

The platform also offers an enhanced client interface including catering for those who trade at night.

Loading...

The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour;  Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).

The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.

Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”

He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.

Advertisement. Scroll to continue reading.

Loading...
Continue Reading

Trending