It appears to be the norm in our region that the pendulum swings from one extreme to the next. In the last five years, we were superman where we could do no wrong. Today, we are lower than a mole’s hole where sunlight cannot touch our economy. Neither case is true nor is either view helpful in what we should perceive as the way forward economically speaking for the region. What had happened is not something new to the region but what was new was the magnitude that took us all by surprise. Even the best amongst us who had predicted a correction of sort never imagined the tremendous speed by which the correction would come nor its power on the state of the region’s economy.

But the question that need to be asked is why did this happen?

For a lack of time to go into the background that made it all happen and without delving into the econometrics of the scenario that we faced and now face, allow me to present one factor who was the villain in this whole scenario and as well as the potential savior. Allow me also to qualify my article by saying that not all the villains were villains and played a sordid role in the nasty situation that we now face. Some were quite prudent and decided not to participate to the degree that the villains did. Others were the driving force that allowed this situation to exacerbate and plunge us all in the dire straits that we find ourselves in these days—The Banks.

As I said, some banks were quite cautious when loaning out money and kept their loan out ratio quite low. Others gave it away like ice cream to children on a hot summer’s day.

Now the situation dictates that the market is thirsty for that most precious liquid— cash. Unfortunately, most banks have decided to withhold this urgent factor to the growth of the economy. But I have to ask the question, how are banks supposed to pay off their staff, customers and their ever-hungry shareholders when they don’t lend out money to create businesses and jobs that will subsequently be feeding them with more cash to allow the circle to complete itself? For those who might not understand what I mean, let me describe the circle to you. The bank loans out the money to the business based on sound shareholders and a good business plan. The business then goes out and imports/manufactures stuff and sells it in the market. For a business to import or manufacture anything, they need a location so an office/warehouse is leased out. This owner of the leased office/warehouse pays his staff. His staff then goes and buys food, clothes, pays off bills and creates new business opportunities that add to the economy. Back to the original company. They too must hire people and buy equipment. This creates more jobs. The company sells items and makes money and then pays back the bank. Now if the banks don’t make loans to these businesses, then no business is created, no jobs are created, no lease of apartments/homes, no cars are bought/leased, no food is purchased, no clothes are bought and so on and so forth. The gist of this is that there is no growth in the economy and the circle starts to create a stranglehold on the neck of the economy.

Banks have duties to their staff, stakeholders and shareholders. They also have a duty to the economy as a whole. If they had failed in the past and helped fuel the unnatural growth that we witnessed and became the villain of the story, they now can release some of that beautifully colored nectar we call cash into the economy and be the heroes that save the economy.

We all can appreciate what a burden it must be for the senior managers to decide to whom to lend and to whom not to lend. I believe that they are intelligent to know a good story from a bad one. I believe that the great senior managers bank not on the present but on the future and yes indeed, the future of the region is bright.

It is easy to attack those whom we perceive have the power of life over us, but let us consider for a moment that they are scared of making decisions that can come back to haunt them. It is our job to persuade them that they can bank on us to be their good client. But it is up to them to take a chance with us as customers if they believe in us and what we are selling.

There is an old English saying that banks are ready to give you an umbrella when it is sunny but will take it away the moment it rains. I hope that our bankers will turn this saying on its head and be the trusted partner that all businesses can rely on.