Covid-19 relief measures update ‘The situation is difficult but not hopeless’ – SBA By Vidya Gappy |13 March 2021

The Central Bank of Seychelles (CBS) and the Seychelles Bankers Association (SBA) held a press conference yesterday on the status of the Covid-19 relief measures.

It was revealed that although times are tough for all stakeholders, the situation is not hopeless.

Present at the press meet was CBS Governor Caroline Abel, the chairman of SBA, Philippe Moustache, the spokesperson of SBA Bernard Jackson, the chief executive of the Development Bank of Seychelles (DBS) Daniel Gappy and the chief executive of Credit Union Tony Volcère.

“Today we have come to accompany the SBA who is giving an update on what they have done for the last year in terms of support the financial institution gave the economy, while keeping in mind the different challenges the clients are facing. 2021 has started and many clients are querying about financial support,” Governor Abel said in her introductory remarks.

Impact of Covid-19 on the Seychelles economy & the banking sector

“Since the beginning of the pandemic, on April 21, 2020, CBS and SBA held a press conference to announce the relief measures provided by the banks. On May 18, we had the start of Private Relief Loan Scheme, gave a moratorium for impacted borrowers and also had an extension of the moratorium. Our sector (banking sector) has also suffered from this ongoing pandemic. We have challenges as our clients are also facing challenges. We have been proactive vis-à-vis this situation and all the banks have participated in providing relief schemes. We are in supportive of our clients. This is an unprecedented situation and it is not easy for us. We have been taking exceptional measures to help our clients,” stated Mr Jackson.

SBA noted that many of their clients are associated with the tourism industry – be it car hires, restaurants etc. “The first casualty of this pandemic was the tourism sector. The first thing that we thought was important was to put in place a moratorium in order to ease the cash flow of the businesses. We changed their contract for the first six months. Together with CBS, the banks came up with a scheme to help businesses in difficulty. At the beginning it was mainly addressed to SMEs but was later extended to corporate businesses.

Impact of Covid-19 on private sector businesses & individuals

Mr Jackson explained that tourism and related businesses have been most severely impacted. “Other sectors have been affected by the decline in tourism and restrictions and rental income is depressed due to renegotiation of rates or early termination of lease agreements. We are also seeing that operating costs and cost of living have risen to the depreciation of SCR. Business and household cash reserves are being depleted to cover unavoidable costs and additional pressures will arise from the discontinuation of FA4JR, SETS & URS. Household income will also decline as redundancies and salary cuts are initiated and finally risk profiles of most business sectors and individuals have therefore deteriorated.”

Impact of Covid-19 on government

The spokesperson of SBA also explained the impact of Covid-19 on the government. “The Minister for Finance announced a budget deficit of R3.9 BN for 2020 which leads to a growing public sector borrowing requirement. This also lead to reduced capacity of government to fund current expenditure and public investment and despite cuts, budget deficit is still high at R3.4 BN for 2021. Support is required from partners to improve the sustainability of public debt and the country would require further policy measures that would impact both households and businesses.”