Shylock business involves arrangement where an individual offers cheap loans to a borrower without security or collateral. As the government moves to implement the new interest rate law, Shylock business is expected to thrive.
When President Kenyatta signed into law the interest rate bill, many Kenyans were happy, but their excitement will be short-lived as banks vowed to lock out small borrowers from accessing loans. The banks will implement this by coming up with new requirements, which small borrowers will not meet.
If banks successfully lock out small borrowers, this population will turn to Shylock for unsecured loans. Shylock will in turn warmly receive them.
The most interesting thing about Shylock is that some don’t even require security or referees. You simply agree on which date to start repaying the loan and the amount you will be repaying monthly.Again, you can renegotiate the terms if you are unable to repay the stated amount within the stipulated time. Banks will not allow that.
It is expected that parliament will come with another law to regulate SACCOs and micro finance institutions.Again, customers who will not like the new terms will turn to Shylock.
One advantage of Shylock business and loans is that interest is always lower than banks and SACCOS.And since every Kenyan needs good things, this is the most ideal place to seek a loan when you are desperate.
As we approach a very tricky future, we are expecting more and more Shylock to start operating in Kenya to tap into the new crop of Kenyans who are hungry for soft loans.