Bank of Mauritius bulletin bullish on US & Eurozone; SME report sees MCB & SBM lead
Bank of Mauritius released its monthly bulletin for April where its comments for the international front indicated that the US economy grew by 0.2% in the first quarter of 2015 on an annualised basis, while economic data releases in the Euro zone were quite positive for the same month. (Image: karibuworld.com)
The currency markets remained volatile during April 2015 and were mainly influenced by data from major economies, with the US dollar initially bolstered upon the expectations of the European Central Bank (ECB) and the Bank of Japan to maintain ultra-easy monetary policy stance, while the US Federal Reserve was expected to raise interest rates from historic lows in the coming months.
As for international energy prices, the report indicated a hike in such prices while food prices declined further in April 2015. However oil prices rose, reflecting higher growth in global oil demand.
Next, the report on SME financing released by the central bank shows that the Mauritius Commercial Bank (MCB) captured the highest market share in terms of providing credit facilities under the SME financing scheme for the period 1 December 2012 to 30 April 2015.
Total loan applications across all banks amounted to Rs 6.1 billion of which 175 applicants were rejected and 78.8% of applications were approved andan amount of Rs 4.8 billion sanctioned against the same.
Here, the Mauritius Post and Cooperative Bank Ltd (MPCB) rejected the maximum applications, with the 49 applicants rejected representing 20.2% of applications received by the MPCB during the period under review.
The MCB was the preferred bank for SMEs, which received 1716 applications for an amount of Rs 3.2 billion and accepted applications to the tune of Rs 2.4 billion, representing a 50.7% share in total SME financing over said period.
SBM ranked second in the list with 948 application received for an amount of Rs 1.0 billion, out of which Rs 875.8 million was approved.
Other banks, namely The Hongkong and Shanghai Banking Corporation Limited and Bank of Baroda, received requests to sanction Rs 162.9 million and Rs 59.9 million respectively as loans, and all loan applications received were approved by both banks.
The amount outstanding as at end-April 2015 with SMEs stood at Rs 1.7 billion and MCB, SBM and Barclays recorded the largest amount of outstanding loans from SMEs.
On the breakup of facilities in terms of nature of financial assistance, loans comprised the bulk of the sanctioned facilities at Rs 2.1 billion, overdrafts came next at Rs 1.9 billion, followed by finance lease facilities at Rs 229.9 million.
It may be noted that under the recent budget announcement for 2015-16, the government is showing a concerted focus on growing the SME sector. The latest budget announcement of the launch of a dedicated SME Bank to provide seed capital to entrepreneurs without any need for personal guarantees showed the determination of the government to encourage entrepreneurship in the island economy, and nurture SMEs through provision of much-needed capital.