During these trying times, which sectors are looking for financing?
In our opinion, the most impacted sector of the economy at this stage is the hospitality and tourism industry. The whole ecosystem which depends on tourist arrivals for survival will likely face a long period of distress and this is where we are seeing the most requests in form of liquidity injections (temporary overdrafts / short term loans) and payment holidays on existing facilities.
The big concern is that travel demand is not expected to reach pre-COVID levels before next year at its earliest, according to GlobalData and thus keeping businesses afloat and enabling people to retain their jobs and income will most likely face some strong headwinds.
What are the implemented tailor-made solutions for the impacted businesses and how do we stand out from our competitors?
Banks, not just in Mauritius, are seeing an unprecedented demand for credit. Broadly clients have been seeking:
One thing is certain. Business as usual is not set to occur for months if at all and short term loans are not enough for long term survival. Acting promptly and efficiently towards a client’s request is as important as tailoring a solution for them in such an environment.
Banks face their own liquidity and capital constraints. Now is the time to demonstrate to our clients how deep our understanding of their businesses are. Our focus is not only on providing credit but sharing meaningful advice in terms of how businesses should define scenarios to develop forecasts as difficult as it may seem, drafting contingency plans and seeking shareholder commitment to support financial commitments. Such practice will demonstrate their long term trading ability and make it easier for banks to lend to an organisation having a clear strategy to navigate the risks post COVID-19.