Photo: ProCredit Bank

At the end of what many called a “challenging” year, we spoke with Igor Anić, Chairman of the Executive Board of ProCredit Bank, about what can really ensure business sustainability in times of high inflation, rising interest rates and global political risks.

Q: At the end of the year 2023, in which the whole world was faced with existential threats, a growing gap between social classes and a general crisis of democracy, dealing with issues of sustainability, i.e. the “survival” of large and small businesses, is justified for many reasons. Do we even know what it means to remain sustainable? Does sustainability mean only short-term tactics to preserve the company’s liquidity, or does sustainability mean a more complex set of knowledge, projections and visions, which are, first and foremost, firmly based on business strategy?

A: At a time when, as many people think, the world is perhaps at the most dangerous point in human history, not giving up on business strategy is a formula for sustainability. Starting in 2009, and for the next ten years, we witnessed an era of low interest rates, which led to the “pumping” of money into the financial and real sectors. The cost of borrowed capital was really low. In such an atmosphere, companies easily managed working capital and investment optimism was high. However, that period was followed by growing inflation and, consequently, an increase in interest rates. With the growing macro and geopolitical risks, this climate has affected both banks and companies – working capital management became a priority. Nevertheless, what we saw was that short-term strategies or tactics aimed at now and immediately visible results were not a sustainable solution. This approach has led to the deviation from the primarily defined goals and has slowed down their accomplishment.


Q: In practice, we saw many examples of ad-hoc projects that are not aligned with defined strategies. Sometimes it is completely justified to take advantage of good opportunities that appear “on the fly”. Should we be cautious so that acceptable business risks do not exceed the chances of business survival?

A: Companies should never ignore the basic financial rules for liquidity management in order to make quick profits. It happens often that payment terms that suppliers give to companies are not respected or working capital is reduced below the minimum, in order to finance projects that should bring quick profit. Just as a ship can never reach port without following the set course indicated by navigation, companies must also not stray too far from their defined strategy. Skillfully combining strategy and new business opportunities is a challenge imposed on us by the new era. It is time to demonstrate knowledge and business skills, but also have the courage to remain consistent with defined goals. In business, as in life, a rule of thumb is that the only sure thing is our ability to adapt to changes.

Q: What awaits us in the financial year 2024? Is next year going to be another one that we have to survive, or will there be opportunities for business growth?

A: The capital market in Serbia is still very shallow. I see an opportunity in the fact that there is still a lot of space both on the stock market side and on the side of debt securities that have not yet been properly utilized. The answer to this question also depends on the way the state will regulate the capital market. What I would advise companies is to invest wisely and to try to use the opportunities that every crisis year brings, but to always respect the basic rules of financing and maintain their “fitness” to fac new potential challenges. One thing is certain – it is not yet time to relax.

ProCredit Bank

Read the story in the new issue of the Energy portal Magazine RESPONSIBLE BUSINESS