Banks perpetuating armed robbery on Kenyans

By PETER WANYONYI

Has there ever been a Kenyan equivalent of a "national dream"? Americans use "the pursuit of happiness" more or less as a national motto. Have we got one of those?

In the event that we do, kiss it goodbye because the banks have already stolen it. And they will charge you for it, like it or not. In fact, the banks are charging you for the time you take to breathe today.

They own you and everyone else you know. They start young so they also own your children.

Back in 2001, Joe Donde, an enterprising Nyanza MP, came up with a Bill that would have capped the obscene profits that banks make relative to the interests they pay out to depositors. But banks are banks.

They have money and the Bill never quite made it into law. Ten years on, another MP from Nyanza has come up with a similar Bill, only more topical and appropriate, what with the hard times, the falling and rising and falling shilling and now the war in Somalia.

broke neighbour

The banks, in a nutshell, take your money as a deposit and pay you an interest rate, and then loan that money to your broke neighbour and charge him an interest rate.

In between, and thanks to your deposits, they engage in all manner of borderline legal machinations that end up creating even more money out of thin air and they lend this newly minted money to that other neighbour of yours.

They then sit back and smile all the way to the Central Bank as "their" money — it’s yours actually — makes even more money for them, thanks to those exorbitant interest charges they levy on loans.

The problem in Kenya is, of course, that we are generally as a people perpetually broke.

With the banks throwing loans at us from virtually all directions, it would be mighty nice if the interest rates the banks paid us on our meager savings were somewhere near the loan rates they charge.

In saner countries, consumer protection organisations exist that force banks to do just that.

Murderous interest rates

But not in East Africa, and least of all in Kenya. Indeed, Kenyan banks will be salivating at the recent news that a newly launched Tanzanian bank posted near 100 per cent profits months after going into business as it raked in deposits and loaned out cash by the fistful — at murderous interest rates, of course.

It is nothing short of armed robbery. Ideally, someone should force the banks to pay nearly as much in interest for our deposits as we pay for it in loan rates, with a little gap allowed them to pay for their Saturday beer and golf.

Unfortunately, the politicians who should force them to behave are part of the swindle because they own large chunks of the banks. So put plainly, you are getting swindled — like your Tanzanian brothers.