Goan consumers brave the crisis

by MICHAEL FISHER
Posted on 2008-10-25
PANAJI- Financial crisis has not dampened the spirit of institutions or consumers in Goa, according to financial planers, bankers and retailers.
“True, consumers are not outright buying as they were a year ago, but housewives have saved for a rainy day, and Diwali is that day,” said most retailers in Margao.
Diwali mood is adding to spending. Prices of everything are down and going further down, said retailers from gold jewellery stores to boutiques, to home appliances stores.
“Visit any favourite clothing store and a 20 to 25 per cent and more discount awaits the buyer,” said sales officials of Cara boutique.
Home appliance retailer Mr Nilesh Nike of Usha Store, Margao, said, he is expecting sales between 25 to 30 per cent for air conditioners, sleek TVs and refrigerators.
“During Diwali, manufacturers usually come out with promotional discounts and incentives, but this time they have been disappointing,” he said.
Most retailers are sharing their commission with consumers to attract sales. A happy retailer is Mr Sham Mavlankar of Prestige, the kitchenware store in Comba, Margao.
“For this Diwali we have so far sold kitchen wares worth Rs 7 lakh and by the time Diwali is over, we are expecting sales in the value of Rs 10 lakh. This is attributed to the 15 and 30 per cent discount offer from Prestige company,” Mr Mavlankar said.
Consumer loans applications to the banks are increasing and banks are getting choosey in their approvals.
When queried Mr Norbert Dias of Canara Bank, said a good amount of stock market funds are coming back to the banks in the form of fix deposits and bonds, which are now the best bet for investors, who have been affected by this turmoil.
To service this `rush of depositors’, banks have started introducing a 500-day FD at 10.5 per cent interest rate. If the deposit exceeds the 500-day period, the interest will automatically drop.
According to other bankers, the rush for FDs is increasing and to service this interest, which is usually high on short-term, banks are being prudent in their dealings.
Banks are lending to very selective clients, especially NRIs and high net worth investors, where the returns are assured. Consumer loans are increasing for hot properties, home appliances, white goods, two-wheelers and cars, in spite of the present high rate of interest.
Moreover, finances will get a lift from the recent pay scale hike by the central and state governments. Banks will be flushed with a lot of money, very soon said an executive of State Bank of India, Margao, referring to the new pay scale hike.
Talking to ‘The Navhind Times,’ Mr Kishore Bawase assistant general manager SBI Margao, said,” the Indian banking sector is ‘largely safe’ from the fallout of the still unfolding global financial turmoil, however, the magnitude of the impact on Indian economy cannot be gauged precisely at the moment.”
NRI funds are also increasing and SBI Margao is expecting a 20 per cent increase in their forex account, which is now close to Rs 500 crore.
Mr Arlindo De Miranda, financial manager of Pinto Investments Margao, said the turmoil offers the perfect opportunity for investors to invest as prices are low.
He advises to check some Fund schemes that have not been affected in this turmoil.
Getting completely out of stocks is not a great idea, he adds, as the potential for returns is much lower in other investments.
Mr Steve Alphonso branch manger of Motilal Oswal said he is seeing a shift in people’s risk tolerance.
He said the worst can’t get any worse and predicts that in 2 to 3 months the economy should start looking good.