SME financing in Mauritius amounts to Rs 4.7 bn over 4 years
The MCB and SBM were the banks favoured by Small and Medium Enterprises, with the former accepting 1684 applications to the tune of Rs 3.1 billion, representing a 52.5% share, while the latter accepted 923 application for an amount of Rs 986.8 million. (Image: entrepreneurcountryglobal.com)
The Mauritius Commercial Bank Limited (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 1st December 2011 to 21st April 2015.
Total loan applications across all banks amounted to Rs 5.9 billion of which 174 applicants were rejected and 79.3% was sanctioned for an amount of Rs 4.7 billion.
The Mauritius Post and Cooperative Bank Ltd (MPCB) was the bank which rejected the maximum applications, with the 49 applicants rejected representing 28.2% of applications received during the period under review.
The MCB was the preferred bank for SMEs, which received 1684 applications for an amount of Rs 3.1 billion and accepted applications to the tune of Rs 2.4 billion, representing a 52.5% share.
SBM ranked second in the list with 923 applications received for an amount of Rs 986.8 million, out of which Rs 856.8 million was approved.
Other banks, namely Barclays Bank Mauritius Limited and The Hongkong and Shanghai Banking Corporation Limited, received requests to sanction Rs 448.3 million and Rs 159.3 million respectively as loan applications.
The Hongkong and Shanghai Banking Corporation Limited and Bank of Baroda were the two banks sanctioning all the applications received.
The amount outstanding as at end-March 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 2.0 billion, overdrafts came next at Rs 1.8 billion, followed by finance lease facilities at Rs 222.8 million.
Tapping into the full innovation potential of SMEs requires favourable framework conditions such as proper access to finance plus efficient support mechanisms to grow. In line with this requirement, the latest budget announced the launch of a dedicated SME Bank to provide seed capital to entrepreneurs without any need for personal guarantees, showing the determination of the government to encourage entrepreneurship in the island economy, and nurture SMEs through provision of much-needed capital.