MCB & SBM remain major Mauritian banks funding SME growth
MCB & SBM were the banks favoured by Small and Medium Enterprises, with the former accepting 1,709 applications to the tune of Rs 2.5 billion, representing a 50.5% share in SME funding, while the latter accepted 949 applications for an amount of Rs 910.0 million.(Image: smeinfo.me)
The Mauritius Commercial Bank (MCB) captured the highest market share in terms of providing credit facilities under the SME financing scheme, according to a report released by the Bank of Mauritius for the period 1 December 2011 to 31 May 2015.
Total loan applications across all banks amounted to Rs 6.2 billion, of which 180 applicants were rejected and 79.2% was sanctioned for an amount of Rs 4.9 billion.
Incidentally, the Mauritius Post and Cooperative Bank (MPCB) rejected the maximum applications, with the 50 applicants rejected representing 20.7% of applications received during the period under review.
The MCB was the preferred bank for SMEs, which received 1738 applications for an amount of Rs 3.3 billion and accepted applications to the tune of Rs 2.5 billion, representing a 50.5% share in SME funding.
SBM ranked second in the list with 991 application received for an amount of Rs 1.1 billion, of which Rs 910.0 million was approved.
Other banks, namely Bank of Baroda and The Hongkong and Shanghai Banking Corporation Limited, received requests to sanction Rs 61.9 million and Rs 172.7 million respectively as loan applications, and all the loan applications received were approved by both banks.
The amount outstanding as at end-May 2015 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 250.1 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.
Accordingly, BOM also released its monthly bulletin indicating that on the international economic front, the US economy contracted at an annualized rate of 0.7% in the first quarter of 2015, whereas the Euro zone economy and the UK posted growth of 0.4% and 0.3%, respectively, during 2015Q1. Currency markets in May 2015 were influenced by the contrast in monetary policy outlook of major central banks and economic data releases in major economies.