Loans Made Easy for Small Traders
A partnership between Fina Bank and the Centre for International Development at Harvard University`s Entrepreneurial Financial Lab has seen a new flavor in the banking industry in East Africa.
Clients of Fina Bank; one of the banks in East Africa will not need collateral anymore to get loans. A new technology that will enable all this is being experimented and once done, the bank will be using psychometric technologies that involve the evaluation based on the entrepreneurial potential or future earning potential of applicants for small business finance. This will replace the screening of new borrowers based on their current wealth, known as collateral-based lending or the social reputation known as microcredit.
The move that has been praised as a breakthrough in profitable lending to small and medium enterprises in Africa will be piloted in Kenya, Rwanda and Uganda. Once it is proved to be successful, it will be very essential in boosting small and medium enterprises in the region financially.
Rwanda to Assess Banks Liquidity Levels
The government of Rwanda through the Central Bank is set to assess the liquidity volumes in local banks; a move that will help to determine whether it should proceed with introducing long-term capital as a stimulus package to accelerate credit to the private sector. The lessening liquidity in local commercial banks has seen a rather tight clutch on private sector’s accessibility to long-term investment capital, a situation that has called for state intervention. The governor of the National Bank of Rwanda (BNR) was reported as saying that according to the local banks’ books of accounts, they have comfortable liquidity levels, but they keep warning that it`s for only short term lending. The assessment is set to be conducted throughout the second half of this year.
New Financing Plan for Public Universities in Kenya
Barclays Bank in Kenya is developing yet a new platform in the bonds market that promises to significantly change the way public universities finance their unending needs. The bank is working on an education bonds plan that will be valued on the billions of shillings worth of assets held by the public universities. According to people familiar with the plan, it has got the potential of lowering the cost of education and increasing access to the universities by the prospective students. The aim is to relieve the institutions of their heavy dependence on short term borrowing that has left them with a yawning budget gaps and ramped up the cost of higher education.
Tanzanian: EAC pact with EU to delay
The government of Tanzania has disclosed that the East African Community (EAC) bloc is likely to delay the signing of a new trade deal with the European Union because fresh issues have been introduced in the negotiations. The five bloc members of Kenya, Uganda, Tanzania, Rwanda and Burundi – are among the nearly 80 countries of the Africa, Caribbean and Pacific group that are in talks on a new pact with the EU. The Tanzania trade minister said that the issues included government procurement, environment and sustainable development among others.