We have now reached the eighth month of our Pulse Surveys and it goes without saying that this long period of data collection would not have been possible without our engaged members! 

 

In the months of October and November we had 75 respondents from 43 countries and 62 respondents from 40 countries respectively.  In terms of respondent breakdown by region, in October, there was an even split of members reporting from Sub-Saharan Africa (SSA), East Asia & Pacific (EAP), and Europe & Central Asia (ECA). However, in November, almost 30% of our respondents reported from SSA and 19% from EAP and 16% from ECA reverting to the respondent distribution prior to October. 

 

The repeat respondent sample we looked at considers responses from July, September, and November. In this sample, there are 24 institutions from 22 countries. Unlike the regular samples, this sample has a relatively higher representation of members from Middle East & North Africa (MENA). 

 

Impact on Business

We continue to see signs of greater hope, after an understandable early pessimism at the start of the crisis.  In October, we saw a decrease in members reporting decline in sales and this trend is maintained in November as well. Furthermore, we are seeing a sharp drop in members reporting a Loss of Customers in November, after brief trend of more members reporting Loss of Customers. At the same time, there was a drop in members reporting a Gain of Customers in November, reversing a prior positive trend. But few feel that we are out of danger. A consistent number of members continues to report asset impairment every month. 

 

Closure and Government Response

We see a trend of gradual opening up of operations among both the general and repeat respondent samples, with one exception. More members from SSA reported increased closures in November when compared to October. 

Initial cautiousness about government actions has evolved into most respondents appreciating the value of measures taken, for themselves and their clients. We see a continued drop in members saying that it is causing new problems for their new business. To what extent is this because our members have adapted to government responses VS governments adapting their responses with time? We will look further into this and try to understand our members’ experiences with government responses.

 

SME Financing

We see little change in lending practices since August, with most respondents now lending to existing and new customers. Not much has  changed with respect to the portfolio health of our respondents - most still report a negative impact. More than half of the SSA respondents reported a significant impact on their portfolio. On the relatively positive side, fewer members reported a significant impact on portfolio in October and November. In addition, it seems that Deferral timelines offered are slightly extending over time.

 

Perceptions of the future

Perceptions for the next month  remain mostly positive, from September through November. Greater business disruption noted earlier does not seem to impact members’ perceptions about their future performance.

In November, members’ optimism on SME resiliency continues to increase, but many still regard a significant number of their SME clients at risk of financial distress over the coming months. Most of the respondents from MENA and SSA expect more than 20% of their clients to be in distress. 

 

We have not examined the impact of guarantee schemes and other specific government programs on our members’ lending behavior.  This might be an interesting topic for future surveys. 

 

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