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The Drag Along Clause in the Prenup

Maria owned a successful dairy products company that had been doing business for the last twenty two years. Her children had been pushing her to let in other investors into the business so that they could reduce their dependence on debt capital. The company had taken loans to enable the rapid expansion that the business had undergone following customer demand for their niche products. Her cousins Tom and Philomena had taken an interest in the business and put in some money in return for a 10% stake each in the company. This money had enabled critical manufacturing machines to be imported and the company was now one of the top producers of lactose free dairy products whose demand was growing in double digits every quarter.

Maria took the opportunity that the external investment provided to transfer another 20% of the company’s shares divided equally amongst her four adult children. As a majority shareholder at 60%, she could still make controlling decisions and count on her children to back her up in the event of a shareholder dispute with Tom and Philomena, fondly referred to as Tomlena by her children. But her decisions were subject to the shareholder agreement that Tomlena had insisted upon before they transferred the cash for their 20% stake. The agreement had included shareholder reserved matters like how much of the profits could be distributed as dividend and when such payment could occur. There was also a requirement that shareholder approval was needed for any company borrowing to ensure that the company did not over extend itself.

But a key clause that her lawyers had strongly advised her to include was a drag along clause. As the business had started getting noticed by potential private equity investors, her lawyer advised that she should put in the clause that would protect her in the event that the minority shareholders decided to block an acquisition of a majority stake by a third party. ‘How would this work?’ she had asked the lawyer. ‘By putting in a drag along clause, you become attractive to a third party buyer as it provides an opportunity for said buyer to get 100% of the company, without painful negotiations with potentially emotional minorities,’ explained the lawyer. Maria would have to ensure that any third party buyer provided the same price, terms and conditions to the minorities that she was receiving.

Maria didn’t like the sound of that. Tomlena had provided capital to the business at a critical time and on very soft loan terms. They had taken a punt that the business strategy to invest in manufacture of niche products would work and that bet had paid off well. Her children had also strong emotional ties to the business as it had educated them and employed some of them. Her lawyer saw the anxiety on her face. ‘Another option could be a tag along clause,’ he suggested. The tag along clause would offer minority shareholders the option but not the obligation to sell to a third party buyer of the majority stake. If Maria managed to negotiate a good price including a deal that had a combination of cash and share swaps with the acquiring party, the minority shareholders could participate in the same deal if they wished to sell their shares. ‘I do have to warn you that many investors do not like these kind of clauses when they find them during due diligence,’ her lawyer cautioned. ‘Institutional buyers do not like to be forced on the negotiating table with parties who do not have controlling interests and are presumed to be weaker from a bargaining standpoint. This might potentially cause a delay or be a deal breaker in the event you do find a buyer.’

Maria was in a quandary. She knew she wanted to eventually sell the business as her children had convinced her to retire early and do a trip around the world. ‘Look, you don’t have to take the difficult road right now,’ the lawyer advised. ‘We can put in a pre-emptive rights clause that gives the existing shareholders the first right of refusal in the event you want to sell. They will have an equal right to purchase your shares proportionate to their shareholding. So if they are unable to buy your shares at the valued price, then you can sell them to the third party buyer. Investors who are willing to deal with minorities would like this as it doesn’t force them to a negotiating table with minorities from the start.’ Maria met separately with her children and with Tomlena. They were all in unanimous agreement that if she sold her shares for good value, they would want out of the business as well. The drag along clause won the day and was inserted into the shareholder agreement. Maria could now focus on building a bigger business and preparing it for an eventual outright sale.

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Twitter: @carolmusyoka

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Banks Are The Unlikely Heroes Today

Many years ago, I was invited by a friend to have dinner at her other friend’s house. We sat around the table, acquainting ourselves with each other while breaking bread and drinking wine as civilized folks do. My friend casually mentioned that I worked at a certain bank (hereinafter referred to as Bank X) and the host stopped mid-pour, the bottle of wine still in the air hovering precariously over an unfilled glass. “I hate Bank X, I hate them, I hate them,” she shrilled, getting more agitated with each virulent proclamation. To be honest, I wasn’t in the least bit interested why she hated Bank X as, in my seasoned experience, this was a fairly common reaction. I just wanted to tuck into the delicious food that was cooling down fast and rejoin the beguiling conversation I had been having with the person seated next to me. I had come to relax on a Friday evening, not to fight a war that I was never going to win armed with nothing but my disarming smile and a dinner fork. But my host railed on and on about her unsolicited Bank X experience until one of the other guests reminded her that perhaps this was not the place and time to get upset and maybe she should just kick it down a notch.

A decade later, Jude Njomo, the member of parliament from Kiambu who sponsored the interest rate capping law in 2016, shot to fame as the people’s savior from what was perceived as a wicked banking industry. Following the resultant credit shrinkage from the banks, who were now forced to provide the same interest rate to borrowers regardless of their risk rating, he was quoted by the Sunday Nation on March 4th 2018 as saying “The credit squeeze to SMEs is a deliberate effort by commercial banks to sabotage the economy so that the government may influence Parliament to remove the interest rate caps.” I often opined on this column that the same people who regarded banks as nefarious in their reluctance to give loans were the same ones who wouldn’t loan their own shillings to a wayward neighbor that needed working capital to run his kiosk. I further opined that the very money people were lusting for to be given at low interest rates for loans was their very own money that they had deposited in the banking industry. The oxymoronic nature of that fact was lost to quite a number sadly.

But that’s neither here nor there. In the last two months, the same banking industry has come to the rescue in the tune of hundreds of billions of loans that have had to be restructured due to the economic downturn that has affected millions of borrowers. From the individual employee whose salary has been cut or who has been made redundant, to the hotels and travel agencies that have had to close their doors as business has completely dried up. Hundreds of thousands of individuals and businesses have applied to have the terms of their loans extended and monthly payments reduced so as to fit within the shoestring budget of a rapidly diminished cash flow projection. The banks have finally become our benefactors and our saviors. Who would have ever thought they would see the day?

The greater concern is whether the banking industry has the requisite bench strength to withstand what is sure to come. Higher provisioning for bad loans, made worse by the recently applied and much stricter IFRS accounting standards are sure to make a dent on profitability and put a strain on retained earnings and erode capital somewhat. Stress on banking liquidity ratios will also take a toll. The ultimate loser will be the shareholders, some of whom were already grumbling on social media last week when a number of banking institutions publicly declared that they would not be paying dividends for the 2019 financial year, dividends that the grumbling shareholders had already budgeted for in their own personal cash flow projections. This step by the banks is a defensive strategy to batten down the hatches and conserve cash for the balance sheet onslaught that is sure to come from the loan restructurings.

The banking industry is often the bellwether for the economic health of a country. The second quarter ending June 2020 results, which we won’t see published until late August will be the first indication of how much blood is in the water. We will then know that reopening most sectors of the economy is not a nice to have, it is a critical must have. That should surely make for interesting dinner conversation over the next few months.

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What everyone needs to know about borrowing in Kenya

[vc_row][vc_column width=”2/3″][vc_column_text]A few weeks ago I received a random text message from a credit reference bureau: “URGENT: This is to notify you of some NEW information on your CREDIT BUREAU records. Send URGENT to 21272 to check now.” (Sic).

It certainly got my attention, and I did exactly as I was exhorted to. I received the credit report on email and discovered that erroneous information had been sent by my bank to the bureau. Did I say erroneous? It was downright wrong. The report related to a six year old dispute on a credit card that in my view had been resolved and forgotten about two years ago. But somehow the dispute resolution slipped through the cracks and 2 years later my name was sent to the credit reference bureau as a defaulter. I bristled in anger. A negative report meant that my personal credit rating would be affected and this would impact on any future borrowing that I may consider undertaking. It also meant that any position for which I would be considered for that requires a positive credit report would be compromised. (A negative credit rating is a mortal sin right below being an adjudged bankrupt in the ten commandments of self-respecting citizens.)

The vein on my right temple throbbed furiously as my legal training kicked in: Never go to a gun battle armed with a toothpick. I googled and found the Credit Reference Bureau (CRB) Regulations 2013, issued by the Cabinet Secretary for the National Treasury and gazzetted on 17th January 2014. A slightly lengthy document that isn’t your staple bedside reading, but one that is certainly pertinent for anyone who uses banking services in Kenya. The regulations were created to provide a legal framework for the provision of critical information on the financial behavior of individuals and businesses in the country. The regulations extensively provide guidelines on how credit information should be shared. Why should this interest you? As a consumer of banking services, your bank holds in its puissant hands the power to destroy your reputation with one flick of a button: SEND. A bounced cheque, a defaulted loan or credit card, an account on an overdrawn status., the examples are numerous. But the bank is well within its rights to let its industry brethren know that you are not worthy of the fake leather shoes that you are strutting about in pretending to subscribe to the ten commandments hereinabove mentioned. As a consumer, you are also well within your rights to know who is sending information about you, and the nature of that information. And since the regulations were most likely drafted by ordinary mortals who have experienced the aftermath of a financial peccadillo or two, they took care of that exact fact under Section 50 (1) which reads “ An institution shall (a) notify the customer within one month before a loan becomes non-performing that the institution shall submit to a Bureau the information on the loan immediately it becomes non performing.” I bet you’re sitting at the edge of your seat waiting for me to tell you that I received that awe-inspiring letter from my bank. Well, hang on to your hats a little bit. Section 50 (1) (b) highlights my bank’s obligations to me even further by saying that it should “notify each customer, within thirty days of the first listing, that his name has been submitted to all licensed Bureaus.” Can you hear that? Exactly! What you hear are chirping crickets, because I received absolutely nothing. If it wasn’t for that CRB’s urgent message – of which I have no doubt was motivated to ensure I sent a highly priced text message to request for a “free” report – I would never have known that I was in trouble.

But this story does indeed have a happy ending. Since I knew who exactly needed to receive a sweetly worded missive reflecting my umbrage at the misinformation that was now circulating at CRBs, I got to typing my slight displeasure (please apply sarcasm font as you read this part). A few calls and emails later, my bank quickly rectified the situation and sent a delete record request to the CRBs followed by a profuse apology for which I am grateful for the kind attention that they gave. But they did it because I knew exactly who to send flowery emails to. Not everyone else does.

Two years ago a company that had borrowed funds from a bank, against which a close friend who we shall call Jane had signed personal guarantees as a co-director, underwent some financial distress. The loan was eventually repaid in full. A full year after that loan was repaid, said bank sent a report to the CRBs that succinctly stated that while there was no loan outstanding, Jane had a history of default. Not the company, mind you, Jane specifically. There was zero communication from that bank that they were sending a negative report, and I can’t say I blame them. How do you draft that letter? “Dear Jane, remember that loan for Company X that you signed a personal guarantee for? It was repaid in full last year. But our grubby fingers are itching to hit the SEND button so we feel now is a good time to let all the CRBs in Kenya know that a company you are associated with underwent stress, but the loan was repaid in full. Please don’t catch feelings, it’s never that serious. Yours truly, Totus Ignoramus.”

The next time you see a message titled URGENT from a CRB, it’s not from the thoroughly bored chaps over at Kamiti Maximum Call Centre. It needs your urgent attention. Your bank is talking about you behind your back. Assuming they are doing what the above two banks are doing, it’s likely that they are not informing you. Girdle your loins and ask for your report. Then brace yourself for what you might find.

[email protected]
Twitter: @carolmusyoka[/vc_column_text][/vc_column][vc_column width=”1/3″][/vc_column][/vc_row]

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Banking Crisis in Africa

[vc_row][vc_column width=”2/3″][vc_column_text]A few weeks ago, I quoted extensively from a speech given by the former Nigerian Central Bank Governor, Lamido Sanusi, in February 2010 where he was explaining, with painful honesty what had gone wrong in the Nigerian banking industry following the global financial crisis which impacted the Nigerian economy hard. He could have been describing the Kenyan industry in many ways. Do we have a problem in Africa? Do we have a problem distinguishing customer deposits, from revenue? And further, distinguishing revenue from profits? The fact is that banks have only one product: cold, hard cash. That’s all that they deal with, and therefore a great responsibility is placed upon them as that cash, with the exception of the capital that shareholders put in, is largely from our pockets. Our sweat, blood and tears in the form of salaries, business revenues and savings is what we place in the hands of total strangers, believing with every fibre of our native beings that they will make it available to us as and when we need it. We trust that the management of these banks will make the distinction between what belongs to us and what belongs to them. A distinction that is clearly difficult to make once a rogue management crosses to the dark side. Sanusi explains the Nigerian experience thus:
“The original title of this paper was “Transformative Disruption: Relocating theNigerian Banking Crisis from the Economic to the Social.” The choice of title
was informed by a strong desire to articulate a correct narrative, in an
environment in which we are confronted by a multi-vocal opportunism
determined to subvert history through the fabrication of false narratives.
Among these, is the assertion that the actions taken by the Central bank are
part of a grandiose “northern” agenda against southern Nigeria. Or that
perhaps it is an “Islamic” agenda being pushed by a Muslim fundamentalist.
There are also other subtler and more sophisticated-albeit just as
opportunistic-narratives. For example the new claim by public officers and
politicians that there is really no corruption in the public service, that
politicians are not corrupt, and that the real corruption is only in banks.
What we have done in the Central bank, is to fire the opening salvo in what could potentially be a revolutionary battle against the nexus of money and influence that has held this country to ransom for decades. This would not be the first time banks
collapse nor are brought to the brink in our national history. And it will certainly
not be the last. But this time there is a difference.
In previous crises we said some banks had failed a passive and complicit
phrase that masked a gross irresponsibility and crass insensitivity. “The bankhas failed”.

……And that is exactly what happens when we refer to “failed banks” as if the
bank itself, some impersonal structure made up of branches and computers,
somehow collapsed on its own. By using-or abusing- the term “failed bank” we
are able to mask what is almost always a monumental fraud. But it is a
deliberate act of prestidigitation. Thousands of poor people, who have kept their life savings in the bank, lose it. Children’s school fees, savings for retirement, medical bills, gone into thin air. And who is to blame? No one really. Or maybe the poor people who were foolish enough to keep their money in a bank that “failed”.
How many people have died of heart attacks due to this tragedy? How many
honest businessmen have been rendered bankrupt? How many people have
committed suicide? How many have died because they were unable to pay
medical bills as their monies were trapped in these institutions? How many
children have dropped out of school? We do not know. Because we live in a
society in which they do not matter. They are anonymous. They are poor.
What we do know is that we have today, among those parading themselves
as role models in society, people who profited from failed banks. Owners and
managers who go on to become governors and senators. Bad debtors who
are multi- billionaires, having taken the money belonging to those poor dead
souls and not paid back.
So here is the reality. The owners and managers of banks, the rich borrowers
and their clients in the political establishment are one and the same class of
people protecting their interest, and trampling underneath their feet the
interest of the poor with impunity.
So this time we turned the tables and said “enough is enough”. The banks did
not fail. They were destroyed and brought to their knees by acts committed by
identifiable people. Do not say that government money has been
stolen. Name the thief. And so, in keeping with that tradition, we did not say
that banks had failed. We named human beings-the management that stole
money in the name of borrowing, the gamblers that took depositors funds to
speculate on the stock market and manipulate share prices, the billionaires
and captains of industry whose wealth actually was money belonging to the
poor which they “borrowed” and refused to pay back.
Fortunately, the President, Umaru Musa Yar’Adua, understood from the first
day that this was an ideological choice we had to make. We could side with
the rich and powerful, and say the banks had failed. Or we could side with the
poor and save the banks but go after the criminals. And we chose the latter.”

That KCB has swung in to provide much needed stability in the wake of the Chase Bank fiasco is nothing short of a miracle pill engineered by Kenya’s Central Bank Governor. But this is not the time to exhale from a dodged bullet. There’s blood in the water and significant public goodwill to see the elite “financial accounting wizards” get what they deserve. A nice room with enough light that will allow them far more time to sit and reflect on the distinction between deposits, revenues and profits.

[email protected]
Twitter: @carolmusyoka[/vc_column_text][/vc_column][vc_column width=”1/3″][/vc_column][/vc_row]

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Bankers are business people too

[vc_row][vc_column width=”2/3″][vc_column_text]A distraught investor called his financial advisor. “Is my money really all gone?”
He wailed. “No, no,” the advisor answered calmly. “It’s just with somebody else!”
I need to disabuse some readers of the notion that banks are charitable institutions. The amount of energy spent chanting dirges about how “banks are out to fleece us” or the more recent, “banks want to finish Kenyans with interest rates” is energy better spent understanding that a bank is a business like the neighborhood kiosk, providing a service of convenience. The less than palatable solution to the purveyors of negative energy is this: put your spare cash under your mattress and go borrow your financial needs from the knee-cap breaking shylock two streets down the road from your house. Enough said: if you’re mildly irritated at my incendiary introduction, let’s keep rocking and rolling as I explain why you need to get over yourself.

The months of September and October 2015 were difficult ones for the Government of Kenya. Cash flows got mismanaged as more money was being paid out than was being received and they had to come to the domestic market to borrow funds to meet their obligations. Bank treasurers as well as savvy institutional investors smelt blood in the water. They had already done a quick back of the envelope calculation on the use of the proceeds from the now infamous Eurobond and figured out that the government had come up short when there were multiple domestic as well as international obligations to be paid. These things really don’t require a rocket scientist, after all, housewives have been calculating and balancing kitchen budgets for years. Word soon spread that the government needed money, and banks as well as institutional investors were happy to step up to the plate. But remember that banks place your deposits in two places: in loans to businesses and individuals or in loans to government via treasury bills and bonds.

Two things will always happen when the government suddenly becomes exceedingly thirsty for cash and dips its beak into the private sector. Firstly, the arbitrage sharks that are always looking for an opportunity will strike. If an individual or corporate with a good credit history at their bank can borrow at 12% as was the case with some, then they will borrow and take the money to the government via the T-bill auction that was giving rates above 22%. That 10% spread is easy money. So easy that the bank’s initial reaction will be to raise interest rates to reduce the arbitrage opportunities that it is providing to some of its clients. Which then leads to the next question, why should the bank be the only one allowed to make money from government borrowing? Well, the fact is, everyone who was flush with cash and spotted the opportunity jumped into the high interest rate bandwagon. Large depositors demanded that the banks give them double digit interest rates or they would withdraw their funds and open CDS accounts at the Central Bank themselves in order to buy government paper. I know an individual who got 19% on his large deposit at a multinational bank in September this year. Now if you recall, I did say that banks fund their loans from customer deposits. When a large number of deposits start to re-price, the obvious impact will largely be on the future loan book that will be funded from the re-priced deposits. There is also an impact on the existing loan book because a bank is constantly trying to manage the profitable bridge between interest received (from loans) and interest paid (on deposits). The net interest income will obviously be impacted from the re-priced deposits. And banks are accountable to shareholders you know, the owners of the business who are demanding a return on their heavily regulated capital.

A final point to the business of banking: contrary to popular belief, it is not all champagne and roses when banks have to consider raising interest rates. The credit risk director will typically sit through that Assets and Liabilities Committee -ALCO meeting (assuming he’s invited) with a furrowed brow and a sinking feeling in the pit of his stomach. Why, you ask? The credit director knows very well about the elasticity of the borrower’s pockets. There is only so much stretching a borrower can do before he decides to throw in the towel and default on a bank loan that is causing more grief and sleepless nights than a private developer’s illegal boundary walls coming down. A borrower has typically submitted cash flow projections to his banks demonstrating that he can comfortably make the principal plus interest repayments over the lifetime of the loan. A minor rate increase will cause some level of digestive discomfort. A major rate increase will cause cardiac level discomfort. Which is why banks ask individual borrowers for their pay-slips and information about other borrowings so that they can tell what the “debt service coverage ratio” is for the individual borrower. How much of her disposable income is going towards servicing loans? The rule of thumb is that it should not be beyond 30% of one’s net income which allows one to pay rent, buy food and basically live decently rather than skating on the edge of financial despair. The same applies for business loans, as there is an ideal leverage ratio for businesses that are in the manufacturing or in the service industries (manufacturing businesses are permitted higher leverage ratios due to their propensity to use loans for purchasing capital equipment).

Therefore it’s not an easy ALCO decision to raise interest rates as the bank will be balancing a need to maintain the net interest spread while managing the increased risk of borrower default. Since the escalated government borrowing had cooled down in November, the banks last week could thus start to yield to the Central Bank Governor’s exhortations to stop loan interest rate increases. Total relief in sight for distraught borrowers!

[email protected]
Twitter: @carolmusyoka[/vc_column_text][/vc_column][vc_column width=”1/3″][/vc_column][/vc_row]

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Confluence of Political and Economic Risks

I recently dined with a European diplomat who asked the ubiquitous question that foreign residents in this country like to do: “What do you think will happen at the next Kenyan elections?” Before I tell you what I answered, I have to state categorically and most unequivocally that I am neither a political analyst nor commentator. I do, however, occasionally comment on the confluence of politics and economics as often happens invariably. That confluence is particularly necessary in the banking industry, where I spent many happy years, when analyzing credit risk of a customer for a term loan of not less than five years.

Within the duration of that loan such a customer is bound to cross the Kenyan election cycle. Depending on the nature of the customer’s business, the company is likely to have difficulties in loan repayments due to cash flow constraints occasioned by poor sales, deplorable debt collections or, heaven forbid, destruction of the company premises therefore impacting on the ability to produce the goods and services that are being procured. My answer to the diplomat saw him imperceptibly swallow and he leaned forward in interest.

“There will be bloodshed in 2017 as the historical patterns demonstrate it.”

“What do you mean?” he whispered.

“In banking, we look at historical behavior as a strong barometer of what future behavior is likely to portend. To understand our history of political violence, you have to start in 1992 when the first multi party elections were held,” I began. “In that year, you had an incumbent who was running against a very strong and credible opposition. That was when Kenya endured the first of several bloody episodes of tribal clashes.” I went on. “In 1997, the same incumbent was running for his second and last term as president. He had the benefit of the state machinery behind him, as well as a fragmented opposition. This time, the political waters were muddied in the coast region, where the pre-election clashes were largely centered. The coastal tourism economy very nearly collapsed and the hotel industry underwent massive bankruptcies.”

“Well what do you make of the peaceful election in December 2002?” the diplomat asked. “Doesn’t that destroy the pattern of electoral violence?”

“Actually, therein lies the pattern,” I responded. “Every time an incumbent is stepping down, there has been a peaceful transition in Kenya. It happened in 2002 and in 2013. But whenever there’s been an incumbent fighting to maintain the status quo, there has been bloodshed; ergo 1992, 1997 and 2007. The 2017 elections are a status quo event. The pattern will be the same.” My lunch partner mulled over this for a few minutes and promptly changed the subject.

In 2008, a few banks took advantage of the politically instigated clashes in the beginning months of the year to blame the growth in non-performing loans. Some of this was not entirely true and was a slick way of reporting previously suppressed bad loans. But you’d think that the regulator would have cottoned on to the games being played. It didn’t. It is not difficult to see why, when you look at the kind of pedestrian analysis the banking supervision department at the Central Bank of Kenya (CBK) undertakes. In the recently released 2014 Bank Supervision Annual Report, the Central Bank dedicates the monumental amount of three sentences to analyze the 2014 asset quality of the entire banking industry. I will pick two of the three sentences as an illustration:

“ The lag effects of high interest regime in 2012/2013 and subdued economic activities witnessed in the period ended December 2014 impacted negatively on the quality of loans and advances. As a result, non performing loans (NPLs) increased by 32.4% to Kshs 108.3 billion in December 2014 from Kshs 81.8 billion in December 2013.”

When your non-performing asset book increases by a third, it requires a fair amount of explaining beyond the vanilla high interest rates and subdued economic activities reasoning. There should be a fairly robust amount of granularity around the specific industries driving the poor performance of loans. It is an open secret that the central government endured inordinate cash flow challenges in 2014 that impacted key suppliers of services, particularly in the construction industry. This would invariably have a knock on effect to the suppliers of construction companies such as cement, cable and ballast for example. But this is what should be of concern as we hurtle towards an election cycle in the next two years. The retail loan book across the banking industry is the single largest loan segment with 3.6 million accounts grossing Kshs 516 billion and accounting for 26.6% of total loans in the market. This is ahead of trade at Kshs 375 billion (19.3% of total loans) and manufacturing at Kshs 237 billion or 12.2% of total loans. Retail loans, codified by the CBK as personal/household loans, are consumer loans and in this market represent the largely salary check off loans that pepper many banks’ unsecured loan offers. It’s highly likely that the bulk of these loans are used to purchase consumer items such as cars, furniture and electronics rather than investment in income generating activities. A political event such as post election violence, followed by an economic downturn caused by reduction in productive capacity of Kenyan companies will lead to retrenchments. You can also never underestimate the capacity of cheeky borrowers to take advantage of politically volatile environments to stop repaying loans due to destruction of work places and such like sob stories. I saw it happen in 2008.

A notable risk therefore sits in the banking industry come 2017: any delays in government payments (partly occasioned by tax collection difficulties on the part of Kenya Revenue Authority) together with probable election related violence will negatively impact bank loan books. Don’t be surprised if you find difficulty getting an answer on your loan application that year. Your bank is just not that into you in an election year.

[email protected]
Twitter: @carolmusyoka