February 2017

Welcome to COVER & ABOVE  “FOR YOU TO KNOW” Page: The Learning and Knowledge 4U2K in, Investment Planning, Financial Services & Wealth Management.

hosted by Irshad JACKARIA  [BCom (Hons), Dip INV, MSc, MCIPS, CFA]

01st FEB 2017: 4U2K – PRIME LENDING RATE !

Do you know how the rate that you pay on your loans is calculated?

In Mauritius, the prime-lending rate (PLR) charged by banks represents a reference for the rate that you will be paying on your credit facilities, like a loan, a lease, an overdraft and even a credit card. It is linked to the repo rate and shares a direct relationship. When repo rate increases, it become more expensive for banks to borrow, should they need to, from the Bank of Mauritius. Hence, they will sell their credit at a higher price, as they will be buying credit at a higher price. This will result in an increase in the PLR, and anyone taking a credit will pay a higher rate. However, banks are free to set their PLR, as per the strategic focus, notwithstanding changes in the repo rate. In theory, the PLR is defined as the lowest rate charged to the most creditworthy customers for a short term, working capital loan. So, anyone who is not most creditworthy, or taking a loan, which is not a working capital loan and/or for a longer term, will pay a higher rate than the PLR. At times, during promotional campaigns, banks and credit institutions offer rates below the PLR, in a way to entice the customers. For your information, prime lending rate in French is “Taux de Base Credit – TBC”. And, Repo Rate in French is “Taux Directeur”, and as we say, at Cover & Above, it gives direction to the PLR.


Your Financial Advisor & Wealth Planner

Irshad is the owner director of Cover and Above, launched in July 2016 and of Knowledge of the ART Corporate Training Academy created in July 2003. He was voted the ‘most successful young entrepreneur of the year in Mauritius’ in the Shell Livewire for 2005. At Knowledge of the ART, he develops, launches and lectures courses in the areas of Banking, Financial Services, Investment, Private Banking, Wealth Management and Insurance. At Cover and Above, he provides financial advices and wealth planning services.

These highly practical courses have seen, over the years, participants from HSC holders with no prior experience to banking and finance personnel like tellers, service representatives, officers, supervisors and managers, as well as graduates and charter holders in banking, finance and accounting.

And, in 2016, Irshad earned the Chartered Financial Analyst ® (CFA®) credential and became a member of CFA Institute, Charlottesville, USA, as well as a member of the CFA Society Mauritius.

The CFA credential is the badge of distinction in the investment management profession. It represents a deep knowledge of investments, a commitment to ethics, and a passion for always putting investors first.

The CFA Institute is a highly respected global community of investment management professional excellence and integrity. The achievement of the charter demonstrates diligence and tenacity, and CFA charterholders are recognised for this unwavering integrity, and by earning the CFA charter, one makes a serious commitment to uphold the highest standards of professional education and conduct.