Knowledge

Author: Patrick Ball

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Date: 30 April 2020

Proactive Crisis Management – Enterprises Taking Action to Stay Ahead of Crisis

Verdant Capital’s clients have proactively addressed the pandemic-induced economic crisis, on behalf of staff and clients, acting in cooperation with stakeholders. The companies are looking ahead at their strategic positioning for the period post crisis. Some examples of the steps taken are set out below.

Tugende, the leading MSME asset finance firm in East Africa, quickly suspended all penalties for two months and allowed clients to retain their assets and keep working where possible under local lockdown rules. Tugende also provided a $6.50 unconditional cash transfer to its 23,000+ clients across Uganda and Kenya to help with household essentials during this low/no income period. Tugende has kept communication active and spoken with nearly every single client and continues to look for further ways to help including relief partnerships and referrals to income opportunities.

Retail Capital, South Africa’s leading merchant cash advance provider for SMEs, early in the crisis segmented its client base of 15,000+ SME retail partners on basis of sectors served and delivery channels in order to prioritize its financing strategies. In parallel, it mapped its competitive landscape to identify expected further gaps in access to financing for SMEs, for example, to step in for less active lending from banks. The company has been strengthening channel partnerships, maintaining its robust automated platforms, and raising debt and equity financing – all intended to fill the expected significant post-crisis demand for SME funding.

Platcorp Holdings, the diversified provider of SME finance across East Africa, early on activated its formal crisis management teams at the Group and across its subsidiaries. Current and expected portfolio impact were analysed by sector and loan product, including projected impact on clients’ trading revenues. The analyses are continually refreshed to allow its teams to respond to its clients quickly and appropriately, while also helping portfolio risk management.

The road ahead remains challenging for sure, but this kind of client sensitive, analytically-driven forward planning will help the institutions manage through while continuing to provide financial services to their local communities that are more essential than ever.

Source: Platcorp Holdings Limited, Retail Capital Limited, Tugende Global Limited

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