Surviving A Turbulent Financial Environment – Lending As A Gateway Part 2

Surviving A Turbulent Financial Environment

Surviving A Turbulent Financial Environment

In Surviving A Turbulent Financial Environment, we had previously broken down how one can survive a financially turbulent environment with an emphasis on lending as a gateway to prevailing. However this week we will be looking at the other 4 survival and recovery steps.

Manage costs

Attention needs to be paid to costs and in turn, a strategic approach is a necessary response. During turbulent times, people often resort to impulsive, top-down and arbitrary cost reduction that have unanticipated and perverse results. Sometimes these actions just shift costs rather than eliminate them altogether. The savings are deceptive. At its simplest, strategic cost management is about identifying specific areas within your lifestyle that diminish the economic value. The next step is to redeploy these resources or eliminate them from your life entirely.

Deal with debt

The primary reason inflation is bad for debt is that it triggers a rise in interest rates. With prices for almost every good and service rising, there’s less money left to cover debt payments. As an ever-greater portion of your budget consumes essentials like food, energy, and rent, tackling debt becomes increasingly difficult. If prices for basic living expenses exceed your income, you’ll have little choice but to borrow more money to make up the difference. As a result, you’ll take more time to repay your debt. Below are some tips for managing your debt as inflation rises:

  • Prioritize paying down high-interest debt first.
  • Cut back on discretionary spending.
  • Cash in your savings to help pay for daily expenses
  • Find a side hustle to earn extra income

Managing risk in uncertain times (Business-wise)

Now more than ever, people need to understand their current and potential risk exposures and give them a high strategic priority. As recent market events have highlighted, treating risk management as just another process is not tenable. Here are some things to do now, especially with your business;

  • Don’t drop the risk ball; when times get tough, risk management too often falls off the agenda. This can be a vital mistake. Turbulent times require the evaluation of any dedicated risk management to consider if they need additional powers and resources.
  • Review the changing conditions; with market conditions changing so rapidly, it is essential to review your business’s existing risk profile and consider how it can be adapted.
  • Ensure an integrated approach; Risk management processes are strongest when they are linked to company strategy and embedded in the operations of the business, enabling insights and best practices to be shared.

 Prepare for growth

Now is the time to take stock of prevailing conditions, exploit rare opportunities and maximize competitive advantage. The best opportunities often arise during downturns when distressed sellers are forced to offload valuable assets at bargain prices. As it is often said, companies make money when they buy, not when they sell, reflecting the importance of acquisition pricing.

Things to do now

  • Scan for opportunities
  • Consider new or emerging markets
  • Keep a focus on innovation
  • Consider new competitive advantages
  • Keep to the strategy

Inflation is an unavoidable phase that affects almost all countries at some point and the best solution is to always be prepared. Tempting as it may be to fall back and put your goals on a halt due to the current financial situation, now is not the time. Be sure to stick to your growth strategy and approach with a well-thought-out plan. And when the need for that extra cash boost arises, you can count on us for quick no collateral loans of up to N2.5million.

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How to survive financial turbulence

As the curtains draw to a close in 2022, the likely depth and duration of the economic downturn remain unclear. Inflation is coming for everything we hold dear and it seems scary times are up ahead. What’s a turbulent financial environment you may wonder? Financial turbulence is a condition in which asset prices, given their historical patterns of behavior, behave in an uncharacteristic fashion, including extreme price moves, decoupling of correlated assets, and convergence of uncorrelated assets.

Wherever you are in the world, the current inflation and its impact on the global economy are dominating headlines. It’s likely dominating your life, too. Periods of financial turbulence relate to heightened uncertainty and volatility in financial markets, and some of those periods can trigger financial crises. Nigeria’s economy is even worse hit and has been struggling to recover fully from the economic recession it is currently in.

Nigeria’s inflation rate surged to 20.52% in August, the highest since September 2005. The inflation figure rose from 19.64% recorded in July according to reports from the NBS. The new inflation rate raises concerns in Africa’s biggest economy, placing pressure on the apex bank to increase interest rates. The report added that food inflation rose to 23.12 per cent in August 2022 on a year-on-year basis, representing a 2.82 per cent increase when compared to 20.30 per cent in August 2021.


How Can Lending Help?

Research has shown 6 survival and recovery steps in a turbulent financial environment which include;

  • Cash is king.
  • Manage costs.
  • Deal with debt.
  • Managing risk in uncertain times.
  • Prepare for growth.

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