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CFC Stanbic slashes rates for old and new loans

cap bill

CFC Stanbic is the first bank to slash their rates on existing and new loans. This comes after President Uhuru Kenyatta signed into law the Bill to cap interest rates levied by banks on loans. According to the bill the rates should not be more than 4% of the rates set by the Central bank. Now CFC has set their rates at 10.5% for both old and new loans.  Other banks that have reduced their rates are the KCB and Co-operative banks. However, the two have only reduced for new loans as they await guidelines from the government on how to treat old loans. The reduction of loan rates is good news to citizens as most have ended up paying much more for loans than they expected.

Why Kenyan bankers opposed the bill to cap lending rates

Kenya bankers association (KBA) was opposed to the bill as they claimed it would lock out those who struggle to access capital. They also claimed that it would go against the financial inclusion policy. KBA incoming Vice Chairman said that the bill would affect the country’s economy. This as he said was because small d medium enterprises (SMEs) who depend on financial support from banks would be greatly affected.

This was the third attempt to make amendments to the Banking act. The first attempt was made in 2001 and also in 2013

Speculated impact of capped bank interest rates

Governments cap interest rates for various reasons that could either be political or for economic reasons. Kenyan members of parliament based their reason on excessive profits made by the financial institutions. The capping is expected to protect vulnerable borrowers from predatory lenders.

With reduced rates it creates larger pool of willing borrowers. Lenders are faced with a challenge:

  • If they should increase lending which may bring in more bad clients who will have non-performing loans.
  • Whether to invest more on processing systems in order to properly identify good clients. This, however, raises operating costs.
  • Invest more on reaching out to good clients which will also increase the institution’s overheads.

All the options increase cost for the financial institutions which may affect the institutions. However, the institutions could absorb the changes and still maintain a profit.

An immediate impact observed after signing of the bill into law was a stampede on the Nairobi Securities Exchange as people rushed to sell their shares.  Other banks paused issuance of unsecured loans, loans on motor vehicles as well as emergency cash loans.

EAC monetary union

East African countries are closely watching the outcome of the capping as Kenya is the first country in the region to introduce the law. It is feared that the new law on interest rate capping could affect the EAC monetary union.  Experts claim that higher risk borrowers will be blocked while banks could be forced to mergers and letting go of staff in order to fit in markets where rates are not capped.

President Uhuru on signing the bill acknowledged there would be challenges. However, he said that the government will monitor the challenges while working on measures to reduce the cost on credit.



News on Led Zeppelin Copyright Infringement Case

The ones interested in music business and music in general, especially the fans of rock genre, have definitely been informed about the recently risen case of rock icons Led Zeppelin News being sued for copyright infringement in their song Stairway to Heaven. The intro of the song was claimed to have been stolen from a track Taurus, recorded by a lesser popular band called Spirit. As the song Stairway to Heaven was released in 1971, whereas the other one, Taurus, was released in 1968, the band suing Led Zeppelin news could make an assumption that the prosecuted had heard their song and used it and present it as an argument. But, did Jimmy Page and Robert Plant, the members of Led Zeppelin involved in the case, manage to bring up compelling evidence to defend themselves? Following the media and the press, let’s see what the final results of the trial that started on the 14th of June are.

A Lawsuit after Decades Arising All of a Sudden

Led Zeppelin News

A common photo from YouTube videos of Stairway to Heaven

First of all, why would any band or musician come up with an idea to sue another band or musician for stealing a piece of music released in, from this point, somewhat ancient times of 60’s and 70’s? According to the article by The New York Times considering the starting point of this case, the lesser famous band Spirit spotted their chance to make even as music business is currently ”grappling with a series of recent copyright decisions“. An example of a similar recent case is related to Robin Thicke and Pharrell Williams who were accused of copyright infringement against Marvin Guy, whose track they used while recording Blurred Lines and they were charged with a high fee by federal jury. In such circumstances, it becomes more obvious why the members of Spirit suddenly decided to try to make some money by taking Led Zeppelin to court. Moreover, they probably hoped they could use the previous copyright infringement case in which Led Zeppelin news was involved, regarding the song Dazed and Confused. But, the jury and the judges rejected all the arguments related to that particular case.

Led Zeppelin News – Whose Side is Evidence On?

What was the opinion of music experts who took part in solving the case? According to New York Times, they claimed that the “dubious” part of Stairway to Heaven is nothing but a common chord, a basic music element that goes back decades. The members of Led Zeppelin involved in the case also claim that the chord they were accused of stealing is just a basic chord progression.

Led Zeppelin News

Robert Plant and Jimmy Page in their young age

So, whose evidence had ground in the end? The final decision was made by the jury in the court of Los Angeles, on the 14th of July, which is exactly a month after the suit was risen. According to the press, the jury and the judges, Led Zeppelin was cleared in copyright infringement case. The jury of Los Angeles made a decision that the rock anthem Stairway to Heaven is a classic and, by all means, an original. So, the opening riff was not stolen, as the prosecution claimed. Although the prosecution lawyers presented the court with testimonies that the members of the two bands crossed paths during tours at the beginning of their careers, the jury accepted the argument of defense claiming that the two songs do not have enough similarities. That was proven as the jury asked for both of them to be played twice. Fortunately for the members of Led Zeppelin, it turned out that the elements used in their masterpiece song Stairway to Heaven cannot be referred to as stolen, because if it were the other way round, they would be obliged to pay a huge tax to Spirit.

And probably the majority of Led Zeppelin fans likes their rock anthem better without a shadow of copyright infringement being cast upon it.