By Victor ‘Tunde Oso & Nkiruka Nnorom With Nigeria’s debt stock growing by 3.11 per cent from $81.27 billion recorded in the first quarter of 2019 to $83.88 billion (N25.70 trillion) at the end of June 2019, economists are almost unanimous in opposition to President Muhammadu Buhari’s request to the National Assembly last week for permission to obtain an external loan of $29.96 billion, which the administration claimed it needed to execute key infrastructural projects across the country. According to the Debt Management Office, DMO, Nigeria’s external debt rose by 163% between 2015 and 2019 at $83.88bn. The total external debt stands at $27.16 billion, while domestic debt climbed to $56.72 billion. Buhari had this same request thrown out by the 8th Senate in 2016, with the then-Senate spokesperson, Aliyu Abdullahi, blaming their action on the incompetence of presidential aides tasked with preparing the proposal. The President, in a letter read at … [Read more...] about Buhari’s $30bn loan request: MAN, LCCI, others caution FG, NASS
30 year home equity loan
Prime Minister Awas Yojana (PMAY) is a central scheme aimed at ensuring housing for all. It offers credit-linked subsidy that divides applicants into four groups—Economically Weaker Section (EWS), Light Income Group (LIG), Medium Income Group (MIG I) and Medium Income Group (MIG II). The applicant should be able to satisfy the eligibility criteria for the applicable group. 1. Income threshold To apply for loan under PMAY, the annual income for MIG I should be below Rs 12 lakh and for MIG II it should be between Rs 12 lakh and Rs 18 lakh. The carpet area for the housing unit should be within the permissible limits of the applicable category. 2. Loan application The applicant needs to make a loan application to his preferred bank or NBFC. The form will contain details of the applicant, his income, investments, other loans, property details and details of the co-applicant. 3. Subsidy scheme application A PMAY subsidy scheme application form can be downloaded from … [Read more...] about How to take home loan under PMAY
When you are ruing about low return prospects for equity in the year ahead, you may be overlooking some attractive opportunities elsewhere. India’s debt market is turning hot, with non-convertible debentures (NCD) flooding the market with offers of up to 10.76 per cent return. Debentures of Shriram Transport Finance, Mahindra and Mahindra Financial Services, Srei Equipment Finance and Kosamattam Finance, which are currently open for subscription, are offering returns between 9 per cent and 10.76 per cent, payable annually. NCD issuances of domestic companies jumped three-fold last year to over Rs 29,300 crore in 2018. And going by the enthusiasm seen in the very first month of the new calendar, this year promises a much bigger mop-up. But before you even look up for explore this opportunity, it is important to understand certain key things about NCDs. What are NCDs? Companies raise funds through NCDs to fund expansion plans, retire debt, support working capital requirements … [Read more...] about 10.76% fixed return! NCDs may prove a better deal than equities this year
I took an education loan of Rs 13 lakh at 8.6% in 2015. The outstanding now is Rs 8 lakh. I opted for a repayment period of eight years as the tax benefit on education loans is for eight years only. I have been claiming income tax exemption on the interest component of close to Rs 80,000 every year. Should I prepay my loan or continue? I am in the 30% tax bracket.Amit Maheshwari Partner, Ashok Maheshwary and Associates replies: Deduction on interest on loan taken for higher education can be claimed under Section 80E of the Income Tax Act. The deduction is allowed for eight years or until the interest is paid in full, whichever is earlier. Further, there is no upper limit on claiming this interest deduction. Hence, considering that you would not be able to reap any tax benefit for this interest payment beyond the eighth year, you can prepay the same within the next four years. A flat is owned jointly by three people. While two of them actually paid for the flat, the third name was … [Read more...] about Should you prepay your education loan before the repayment period of 8 years?
Just a few days after the Reserve Bank of India maintained status quo on key rates, the country’s largest lender, State Bank of India (SBI) announced a reduction in its one-year lending rate. SBI announced on Monday that it has cut one-year marginal cost-based lending rates (MCLR) by 10 bps. The one-year MCLR will come down to 7.90 percent from 8 percent. The new rates will be effective from December 10. All the other rates remain the same. According the bank’s press release, this is its eighth consecutive MCLR cut this financial year. The bank has not cut interest rate on its repo linked loans, nor has it reduced fixed deposit rates. The RBI governor, Shaktikanta Das during the monetary policy press briefing said that although it is not in a hurry to keep reducing interest rates, it would work to ensure that the transmission turns more effective since much needs to be passed on. Monetary transmission has been full and reasonably swift across various money market … [Read more...] about SBI reduces one-year MCLR by 10 bps
Around 160 out of 323 equity mutual fund schemes failed to beat their benchmark in 2019. The data looks grim, but it is relatively better than 2018 calendar year. In 2018, 76% equity mutual fund schemes couldn’t beat their benchmark.The value-oriented equity mutual fund category was the worst performer of the year. Around 77% schemes that follow the value investing strategy underperformed their benchmark. The value fund category is underperforming for the second consecutive year. In 2018, 92% value-oriented schemes failed to beat their respective benchmarks. The category, on average, generated 1.83% in 2019 vs -8.70% in 2018.ELSS and multi cap mutual fund schemes stood next in the list of laggards with 63% and 53% of the schemes in the respective categories underperforming the benchmark. However, except for one tax saving scheme, all other schemes in both the categories have given positive returns in 2019. On an average, the multi cap category generated 8.74% in 2019, much better … [Read more...] about 50% equity mutual funds underperform their benchmark in 2019