What are hard economic times

hard economic times

Great economies are facing hard economic times and are struggling, hence living in a country where majority live below the poverty line, things seem to be moving from bad to worse. The Banking industry is also affected by hard economic times.

If one reads the Bible, one will notice that these are not unique situation. There are stories of mothers eating their babies and people feasting on the refuse of the donkeys. People in ancient days also lived through hard economic times too.

One of the most mind boggling things about the human species is the ability to adopt and be very innovative during these times. Tough people have an inner strength and that is why they have the ability to last during tough times. It is not about physical strength but inward strength that they draw from.

 Some of the secrets for living in hard economic times

• They acknowledge the change due to living in hard economic times and that is not business as usual.
• Apart from acknowledging the times they are living in they set strategies on how to thrive while living in hard economic times. This is to ensure that at the end of these hard economic times, they will not be beaten to pulp. Put in simple words they do not just whine but take action.
•  one must avoid taking loans and learn debt management strategies

Highlights of financial strategies one would adopt while living in hard economic times

1. Stick to your budget especially on non essential expenses. Take for example your monthly budget for fuel for your car; when you realize you are spending beyond this budget then reduce the number of times you use the car and stick to the budget. For ladies maybe one should reduce the visits to the salon, one can opt to do basic hair maintenance like washing or even treating the hair at home.
2. Please do not dispose off your near cash investment to meet your daily living expenses. These are assets such as shares. After all, with the poor performance of the economy one is likely to sell them at a loss.
3. There is no use on spending on holidays one cannot afford. You can opt to take the family for a simple drive to the park and spend quality time together instead of taking an expensive trip to the coast yet they cannot afford the same so they have to borrow. Let prudence take the place of pride, put image issues aside everyone is feeling the pinch.
4. Make sure when going to the supermarket a shopping list should be in hand to avoid buying what one does not need.

In the middle and lower class bracket where the salary is not increasing as fast as the inflation rate, disciple is one of the key qualities adopted.  Let us keep hope alive as we see these hard economic times through.

Incoming search terms:

• kenyan banks debt (2)
• hard debt follow up software (1)
• why the banking industry in kenya is attractive (1)

A credit card is a loan that is given by the bank but the monies are loaded to the card account and not a bank account. A credit card account is usually held in a credit card management system, which may be different from that of the core banking in kenya system.
Banks or Financial institutions subscribe to the owners of the  Credit card/s trademark. They are given the license to run the Credit card/s as per the association rules and regulations at set fees. Visa and MasterCard are examples of such associations. The associations facilitate the purchase and payments networks, so they work like clearing houses.

Credit cards may be chip or magnetic strip.

A chip card means that information of the account is held in a chip. A magnetic strip card is one where the information is held at the back of the card in a magnetic strip. As cards are migrated from magnetic to chip, the cards may have both features present in the plastic.

In some instatnces the credit cards are virtual cards meaning there is no physical card. These category of cards are maily used for internet and the details of the card account are what is availed to you.

Requirements for aplying  for a Credit card.

You can apply for a credit card by completing the application form. You will be required to furnish the bank with original documents that identify you, where you leave and sourse of income. Using the identification documents, the bank is able to chech on your credit worthiness. If the applicant has handled loans in a good way and makes timely repayments as required, then the credit worthiness is high, if on the other hand you have mishandled loans given to you, your credit score is low. When the credit score is low, the following actions may be taken against you by the Bank;

• you may be denied the credit card facility,
• Your application may be deferred until the score improves. Usually a time period is given for this,
• Your application may be processed but the limit advanced is very low,
• Finally, you may be asked to secure the credit card by placing a fixed deposit with the bank.

In conclusion, anyone can apply for a credit card but they have to show steady income that is due to them. It is easier for an employed person to access credit card facilities than a self employed person.

Incoming search terms:

• kenya debit cards (3)
• banks with credit cards in kenya (1)
• credit and debit cards (1)
• credit card terminal kenya (1)
• how much is a credit card in kenya (1)
• self load of credit cards in kenya (1)
• using debit cards in kenya (1)
• visa card virtual kenya office (1)
• which bank in kenya has a mastercard account (1)

What is debt Management?

 Debt management is the art of balancing the amounts owed against the amounts repaid. Information on personal debt management is key to debt provision companies to access the borrower. Debt management companies use credit reference bureau companies.

The information shared among lending companies helps in monitoring customer credit score.  The debt rate in the world has reached unmanageable proportions and different ways of managing debt have been devised.

Different Ways of Managing Debt

Acquiring a loan is easy but paying it back can be hectic for -many individuals. People use different ways to manage debts differently.

Prepare a Budget to manage debt

Preparation of a budget is important. When paying off your debt it is advisable to follow and maintain the prepared budget. The amount of money which is to be paid should be kept separately and try to save until you have enough money to clear the whole debt..

For easy debt management you should monitor what you spend and how much you spend each day. Saving money helps you to pay your debt quickly.

Assess How You manage Debt

It is important to assess and analyze how you pay your debt in order make proper repayment calculations regarding your debts. Prepare a list which includes all the items and monies that you have to use. This will help you to calculate the total amount of money you have. Deduct money for the debts from your total.

Manage debt by paying debts in a predetermined order

If you have a lot of debt, first decide to pay off the one with the highest increasing rates of interest then the rest can follow. You can also pay your debt according to the one you acquired first. These options may help you reduce your debt gradually.

Talk to your creditors to manage

Tell your creditors about what you can afford to repay and how much will be repaid at specified times. It is important to ensure all creditors agree to the terms and conditions of the repayment plan

Deal With Your Mortgage Payments as A Way of Managing Debt

If you have a mortgage loan you should improvise on paying them off slowly since their interest rates are relatively low compared to others, such as education loans. The value of a house appreciates with time, while the rate of interest may remain constant or may change in the future (on few occasions)

It is advisable that you try and repay the other debts first. Loans on secured assets can be repaid slowly, depending on their rate of interest.

Get guidance or help on managing debt

To get rid of your debts quickly you require help from a debt counselor. The counselor helps you to overcome your debts in a short period and gives you guidance on various ways of paying debt easily.

Smart spending is usually a result of counseling in managing debt.

Incoming search terms:

• barclays bank kenya loan defaulters (1)

What is a virtual terminal

A virtual terminal is a terminal that can be used for processing any credit card transactions from any computer with internet access anywhere in the world. Virtual terminal can also be referred to as an online version of what is traditionally known as Point of Sale (POS) terminals for example the ones in the supermarkets, hotels and restaurants, retail clothing outlets and many other places.

Due to the increase in use of credit cards on online shopping and in order for these outlets to be competitive, it would be very important that they acquire the virtual terminal.

Competetive advantages of acquiring a Virtual terminal

• A virtual terminal enables the merchant to reach a wider market and therefore increase their sales. The merchant is able to increase sales volume when they acquire a virtual terminal as they are able to make online transaction for a wider market.
• Acquiring a virtual terminal makes the merchant have a competitive edge over their competitors. This is because the merchants are easy to access because of the online accessibility to their customers and potential customers.
• By acquiring a virtual terminal a merchant is able to grow in business by increasing sales, reducing the costs and growth in the profits of the merchant company. the merchant becomes more efficient and effective.

 Requirements for merchants who aspire to acquire a virtual terminal

1. The merchant acquiring the virtual terminal must have the capacity to handle  online transactions. The capacity will include computers and human resource. The question that will be raised is if the merchant acquiring the virtual terminal has the ability to securely and efficiently handle a series of tasks. These tasks that the merchant acquiring the virtual terminal will be able to handle include verification of each transaction, documentation of the transaction and processing of the credit card transaction.
2. The merchant acquiring the virtual terminal must have a very efficient data security system. The system should be secure and safe for the merchant to be able to acquire the virtual terminal.
3. Virtual terminal can also be acquired by the merchant if the merchant has a good reputation financially. This is to say that the credit rating of this merchant is good so as to be able to purchase the virtual terminal.
4. A merchant can also acquire a virtual terminal if the merchant has a wide network of outlets. It would not be prudent to acquire a virtual terminal if the merchant has only  one outlet.

We will look at the various card enhancements that a card company can use to competitively stay ahead of other companies. When deciding which card company to apply to for a card, it would be good to look out for the card enhancements.

Card Enhancements

• Card Enhancements -Credit card protection

This is very important as the card will be paid in case you die or in case you are retrenched or incapacitated. Your family will not have to pay for your debts because the amount of your credit limit had been insured. The insurance may be free with the card or the cardholder may be required to pay a minimal amount.

• Card Enhancements – Discounts/rebates

Cards companies work with various outlets and service providers to get their cardholders discounts or rebates. The card companies may refund the customer by crediting their card companies with a stated amount if they spend the required amount for the campaign. These discounts and rebates are very popular and customers are very happy to spend as much as they can to get free or discounted prizes.

• Card Enhancements – Emergency services

The card companies also may provide emergency services to the cardholder. Emergency services may include emergency cash advance facilitation where a card is lost when the cardholder is travelling. The cardholder may also get a card replacement when their card is lost when they are in another country. Cardholders may also get free advice on where to seek medical services as they travel.

• Card Enhancements – Financial services

The cardholders may be able to access financial services in or outside their countries as a bonus to having that particular card. The services may be free or at discounted prises. These are important especially for those who are new to use of cards and have little financial exposure. It prevents cardholders from going into debt.

• Card Enhancements – Insurance

Whether it is lost card, medical or travel insurance, it is important to find out which insurance if any is provided by your card company to cardholders. Some of the insurance is free and others require that the cardholder pays for it. The travel insurance is a favourite especially where the cardholder travels a lot. In case the cardholder gets sick or loses their luggage, they are refunded by the insurance company.

• Card Enhancements – Travel services

Additional to the insurance the cardholder may get consirge services, pick up and drop off services at hotels and airports. The cardcomapny may be working with certain airlines making the services more accessible.

• Card Enhancements – VIP services

Services for ‘very important persons’ are mainly given to high net work cardholders and are usually not availed to all the cardholders. The services are geared to ensure that the experience of the cardholder is the best that there is. The cardholder may be availed a personal assistant, airport lounges and office services when they travel

• Card Enhancements – Rewards

Many card companies participate in the rewards and loyalty services. These are seen as a way to ensure that they reward their loyal customers and make the customers feel valued. These rewards are for all cardholders. Card companies usually work together with the betting and licensing board.

The above card enhancements are a way to ensure cardholders are rewarded and retain the cards they have or to get new customers. As you decide which card to get, always consider the card enhancements that the card company will make available to you and compare them to your needs.

Incoming search terms:

• kenya credit and debit card association (4)
• cardenhancements (2)
• regulation of debit and credit card company in kenya (1)

Credit and Debit Cards associations

Both MasterCard and VISA are in the process of opening Regional Offices in Kenya for Credit and debit cards.  Is this move by both organizations a sign of commitment to the region after years of neglect, or a response to the threat of their business model posed by mobile commerce? Mobile banking has taken over the day to day transactions of both individuals and corporations in Kenya.

The Kenyan market is unique in the payment space as mobile has leap frogged over all other money transfer and banking channels. Poor communications networks and infrastructure, coupled with the non availability of simple acceptance devices has been the cards’ down fall in many countries especially in Africa. The Automated Teller Machines and Point of Sale are expensive leading Mobile transactions taking over and to fill that void.

Many transactions in Kenya happen on a meal by meal basis with the corner shop and the informal sector have helped mobile commerce to outpace cards. The volume and value of transactions the mobile environment handles daily cannot be equaled by any other payment channel.

credit and debit cards’ have suffered declining competitive edge

The decision of whether this is a good thing for the banking industry depends on where one stands? Maybe not if you are a banker, while the consumers have a totally different view.  The flow of fees earned in the mobile space is also different to the card model. Corner shops prefer the mobile model as they earn revenue instead of lose it in the card model due to commissions paid out for card usage.

Unless the two giants in the card space rethink their model and come back with pricing and rules and policies that suit the local market, the future of Credit and debit cards looks bleak. Credit and debit Cards will become prerogative for the middle to high income people that travel and for tourists.

decision time for credit and debit cards’ business

The big guns need to urgently relook their Africa Strategy to ensure a brighter future. We wait to see how the payment industry will change and if the card associations realize that one size does not normally fit all. Credit and debit cards issuers and acquirers must customize the products to suit their corporate needs.

credit and debit cards

Incoming search terms:

• credit and debit cards volumes in kenya (1)
• inurl: com/category/credit (1)
• kenya payment card market (1)
• payment card (1)

credit card collections

Delinquency of the cardholder accessed by the credit card collections team

The credit card collections must assess the delinquency of the cardholder. A delinquent cardholder is one who has missed on at least one repayment on their credit card bill. The credit cards have a date on which a cardholder must make payment by or before. Where a cardholder misses the deadline, they are said to be delinquent.

Credit card collections teams collections options

The credit card collections team makes the decision on which collection option they will take to collect on the delinquent cardholder.  The collections team makes a decision to either collect the debts in-house or to outsource the debts. Outsourced debts are those that are given to a different debt collection company to collect on behalf of the card company. The debt collection company is paid a commission of the collected debts. The credit card collections team may decide to debt collect using the debt collectors employed by the card company.

The decision to outsource debt collection is usually due to the time it takes to collect the debts and the expertise that is required, which the card company may not be willing to engage. The card companies mainly outsource the debts that are past six months old, where interest can no longer be recognised as profits for the card company.

Account sorting decision by the credit card collections team

The collections team sorts the cards using various criteria depending on the credit card collections team. The accounts may be sorted according to accounts that are ranked as high risk and are likely to end up delinquent. Sorting decisions are not always time based. Where the amounts are large, the period of delinquency becomes irrelevant. The huge debts must be collected first and most effort is concentrated on this option.

Like all credit card collections decisions, the methods and ways of ensuring that cardholders do not eat up all the profits by being delinquent is key. The card companies must engage the right methods and decisions in order to maintain a healthy balance between the credit they give out and the collections they make on the same credit. When credit card collections teams make wrong decisions, card companies make untold losses and are sometimes forced to close down.

Incoming search terms:

• credit card debt collection in kenya (1)
• credit cards dbt collection in kenya (1)

 Clients Customer experience at a bank

After several months of literally  being tracked down by a sales representative or sales executive as they prefer to be called my group decided to open an account at one of the banks, being satisfied that that the features looked good and would serve the interest of the group.

Six months down the line the group held elections as some of the office bearers were moving out of town and it would be prudent to replace them to allow smooth running of the group. There was therefore need to change the account signatories and one of the office bearers was mandated to get all the requirements needed from the bank. This was in readiness for when the other office bearers would be available for this process.

After ensuring all the requirements previously obtained from the bank were in place the office bearers walked confidently to the banks sure that the process would take the shortest time possible. When they got to the customer service desk after patiently waiting on the queue  a blank looking officer informed them that those are not the requirements and went ahead to produce a totally different list of requirements.

Protesting, they explained that they got the previous requirements from that desk and even their request to see the manager was declined. As at this moment the group has not been able to change the signatories and this has greatly hampered the operations of the group.

Reasons for poor customer experience

• Once one opens an account then they become a statistics to the bank, the customer no longer has a face or a name. The bank can proudly say they have reached the one million mark in number of accounts maintained. Customer experience is no longer necessary when the numbers are being achieved.
• Lack of staff training on all areas of banking. Training of staff members on the procedures of the bank is no longer a priority to the banks. It seems like provided you can communicate, press keys on the computer key board and sit on a desk that’s it. One will catch up on procedures as they sit there. This reduces the customers experience since the customer is not assisted.
• Quality of service is not in the interest of banks. It is the number of transactions that matter, profits have become more important.
• Banks are aware that the justice system is slow and a customer needs to have huge resources to file for damages. The banks will not bother to keep their promises. An ordinary account holder is unable to sue the bank due the costs.

Ways for the banks to improve customer experience

• Training is a must. The staffs must be trained in all aspects of serving the customers not just in selling.
• The bank must have standard operational procedures which are known and available to all staff. This will lead to consistency on all operations and forms that customers have to complete. This enhances customer experience.

Customers are the reason why banks operate. The banks must therefore make it a point to improve on their customer experience offering.

Incoming search terms:

• what are some ways a bank can improve client experience (1)

Types of debit cards

Proprietary debit cards

what are debit cards

Debit cards given by a bank to access just that banks accounts and are known as proprietary card. The cards are sometimes also called ATM cards since they are used just at the banks ATMs. Is the bank has merchants or outlets where they have connected their systems, then these ATM cards can be used to access those merchants. In some instances the banks come together and form a common network of ATMs especially. After membership, the proprietary cards from various banks can be used in these common outlets. Charges are agreed amongst the members.

Co-branded debit cards

When a bank works with another company and they come up with a card that would suit both the institutions members and customers, these are known as co-branded or affiliate cards. The cards may be proprietary or they may be association debit cards. Co-branding is usually done with hotels, clubs, malls and airlines. Both institutions work together to give their customers more convenience and to grow their customer base. Both institutions gain from the partnership.

Association debit cards

Banks may sign up with associations like mastercard and visa to give out their branded cards. The association debit cards are widely used globally. The networks for associations are very well networked and use modern and sophisticated technology to ensure cards so branded are acceptable and create convenience for the financial institutions and their customers. There are stringent rules and regulations for those financial institutions wanting to join associations. Joining fees, annual fees and transactions are some of the charges levied by members. The associations have rules not just for joining, but after joining there are rules of engagement between the associations and other members.

Prepaid debit cards

The prepaid debit cards are used by financial institutions to collect funds before the funds are used. Unlike many other cards, the prepaid cards are paid for before the money is used. There are many kinds of prepaid cards like: gift cards, travel cards, store cards, and payroll cards. The prepaid cards are used as a way to control funds and help in financial management.

The choice of which debit cards financial institution or potential cardholder should get depends on which card is most convenient for them.

Incoming search terms:

• co-branded debit card programs in the bank (1)
• how many debit cards companys in kenya (1)
• prepiad visa cards in kenya (1)

Help with debt

When taking a loan it is important to get debt advice or help with debt decision and timing. This advice includes and is not limited to: how much money to borrow, whether the loan is necessary, the cost of funds and the best repayment period and is it a quick Loan.

The borrower should ensure that they understand the terms in the contract. They should first read and ask for clarification on any issue not understood. Help with debt jargon may be sought from legal and financial advicers.

In the event the loan becomes a challenge, the borrower should seek help with debt repayment immediately.

 Tips on help with debt management

1. Self examination- candidly investigates the new situation and collects as much information as possible to the exact cause of the default. Borrower has to be very honest so as to get the root cause of the problem if help with debt is to be realized.

2. Ensure that all the paper work concerning the loan is in order, including the position of the collateral held. Factors to be confirmed about the collateral are: if the charge documents were well executed and if the security margin is still adequate.

3. A meeting should be held with the lender to discuss the position of the loan and how they intend to repay the loan. The lender is also interested in the borrower making the payments on time, and so they help with debt management skills. The lender sometimes allows the loan to be rescheduled.

4. During the meeting a clear objective on the way forward based on the information already collected should be obtained. The lender should strike a balance with the borrower and come up with an acceptable and the best solution for both parties involve without any greater loss being incurred.

5. The lender should help with debt restructuring. The lender should confirm in writing to the borrower the decision of the meeting. The time frame for the repayment and the reviewed repayment period should be clearly indicated. At this point any penalties to be charged should be indicated to avoid last minute surprises.

6. The lender should control the position agreed on firmly and carry any intended action through. The lender should help with debt diarizing and sending reminders to the borrower.

Any kind of Help with debt should be welcomed by the borrower so that they avoid debt problem loans

Incoming search terms:

• types of loans offered by banks in kenya (2)
• agriculture lending in kenya banking induastry (1)
• causes of bad debt in banks in kenya (1)
• inurl:com/category/loans (1)
• modern banking in kenya (1)