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Don't bank on the banks

Discussion in 'Biashara, Uchumi na Ujasiriamali' started by The Finest, Feb 4, 2011.

  1. The Finest

    The Finest JF-Expert Member

    #1
    Feb 4, 2011
    Joined: Jul 14, 2010
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    Business doesn't get done without credit.Neither, for that matter, does much in modern life in general. This means we must deal with banks, an action that makes people nervous and disheartened.It also means drafting business plans to explain your company's operations and future goals.Of all the demands placed on business people, especially those running start-up companies, dealing with banks and drafting business plans are two of the least enjoyable.

    Banks want to be your lender and not you partner, banks love to market themselves as being your partner in business.The idea of having a partner with billions of dollars in assets may give you a warm fuzzy feeling, but it's not really true.The role of the bank is not to be a venture capitalist or a business partner;its to lend money that is expected to be paid back with added interest, which represent the banks profit, that's their business remember that the bank's business is to recover the money it lends along with interest accrued.If there is no guarantee of recovering money, the interest charged is relevant.That's why banks make such an effort to assess the security of their loans.

    NI HAYO TU....
     
  2. P

    Prime Dynamics JF-Expert Member

    #2
    Feb 5, 2011
    Joined: Dec 30, 2010
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    Man i think you have to bear in mind that banks are profit making financial institutions. They have no time to take higher risks by leading money to business beginners however much beautiful (or representable) your business plan may be. Since chances of recovering their money may be too slim. This is why banks only provided money to existing business to give them momentum. In return you have to share (your profit) with the bank by paying back some interest. Also you should take note that if a bank gives out a few loans its profit margin decelerates. However, the more deposits in a bank the safer the bank. Take the bank's position if you were the one keeping people's money, you will be taking very high risks in keeping it, so as a result you have to make sure that you get something out of it. Banks take full responsibility in keeping people's money and in return they (banks) have to be fully responsible once the lend out money to their business partners (customers). Thus they demand security.
    The only thing you have to know Mr THE FINEST is how to play with the bank interests. Mkuu benki niza muhimu sana katika biashara so please go ahead and bank on the banks!
     
  3. T

    Taso JF-Expert Member

    #3
    Feb 5, 2011
    Joined: Jun 12, 2010
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    Sio hapa. Hapa Tanzania hakuna robust credit system.

    Na biashara zinafanyika.

    Ni hilo tu.
     
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