Khanoba Collins: Chief Operating Officer, Letshego MFB.
As we brace up for the gradual opening of businesses and MFBs returning to full operations in the coming days and weeks, the disruption from covid-19 will forever reshape our world of doing business. It is imperative for MFBs to immediately change the way they do business in order to remain in business and be competitive.
MFBs will struggle to retain customers during this period due to their inability to meet customers’ needs occasioned by government lockdown, local & international borders closure and the general impact of covid-19. MFBs may experience a sharp drop in customer numbers, note this is only a temporary situation as customers will always be there when the pandemic storm is over. Do not panic while making sure you get your post covid-19 business plan and strategy right.
Rework and update your financials especially in regards to your PBT. Delivering on the numbers is as important as keeping your job. Refresh your KPIs and ensure they are realistic with current circumstances. If you are unable to grow the revenue in line with budget, then you must cut down on your operating expenses as much as possible i.e. maintain a lean operating budget?
Deal with the credit monster – PAR. As we resume for business, many MFBs will face a loan portfolio delinquency problem and without pragmatic and dynamic approach to loan recovery, loan loss provisioning will further wipe off the little generated revenue. You cannot afford to make do with the traditional methods of loan recovery in post covid-19 era. Customers’ loan default will see an uptick as many MSME entrepreneurs will be unable to operate their businesses as before covid-19 due to change in supply source, clients demands, mobility, unfavorable supply credits etc. The covid-19 pandemic will cause a high portfolio at risk – PAR, even with repayment holiday granted by most banks. A few businesses may experience total collapse and unable to return to business while some will struggle for a longer time to stabilized. Customers in arrears will see their PAR bucket deteriorate with closure of businesses and fall in demand due to economic slowdown.
MFBs must take advantage of covid-19 and embrace technology. Post covid-19 will propel MFBs investment huge in technology for delivery of financial solutions to their customers. We should depend more on virtual spaces for meeting customers, marketing & selling our financial solutions. Any MFB with no online financial service solutions for her customers will surely be living and operating in the past and no sooner than later, will seize to be a major player in the industry.
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