The Australian Banking Association (ABA) has released a report that shows banks have increased their lending to small and medium enterprises (SMEs) by 28% in the last financial year. The report, titled Banking By Numbers, reveals that banks issued 302,945 new loans worth $200 billion to SMEs in 2023, bringing the total amount of credit to SMEs to $588 billion.
Banks support SMEs amid rising costs and challenges
The ABA CEO Anna Bligh said that the report demonstrates how banks are supporting the “lifeblood of Australia’s economy” by providing access to capital and financial assistance. She said that banks understand that many SMEs are facing difficulties due to the “quick succession of interest rate rises, inflation and associated cost of living challenges”.
“This is why today the ABA is launching a new Financial Assistance Hub, to help small businesses and customers understand what banks can do to help those experiencing financial difficulty,” Ms Bligh said.
The Financial Assistance Hub is an online resource that provides a step-by-step guide for customers and SMEs who are struggling with their finances. The Hub offers information and advice on how to contact banks, negotiate repayment plans, access hardship programs, and seek professional help.
Business groups welcome bank initiatives
The launch of the Banking By Numbers report and the Financial Assistance Hub was attended by business representatives from across Western Sydney, where the ABA and Business NSW hosted an event on the ‘Resilience of small business’.
Business Western Sydney Executive Director David Borger, who spoke as part of a panel at the event, praised the ABA for providing an easy to navigate service for SMEs.
“The most precious resource a business owner has is their time. Providing them with an easy to navigate service through the Financial Assistance Hub is a great initiative to provide meaningful assistance when many business owners are feeling the impact of rising costs, inflation and interest rates,” Mr Borger said.
The Council of Small Business Organisations Australia (COSBOA) CEO Luke Achterstraat also welcomed the report and the Hub, saying that they show a positive sign of bank support for SMEs.
“We know that access to capital is critical for small businesses particularly with a perfect storm of costs across the board. While there is more work to be done, these latest figures indicate a significant uplift in SME lending which is a positive sign,” Mr Achterstraat said.
Banks commit to funding financial counselling scheme
Ms Bligh also announced that banks are ready to support the Government’s voluntary financial counselling scheme, which is expected to start in January 2024. The scheme aims to provide free and independent advice to people who are in financial stress or hardship.
“Banks stand ready to support the Government’s voluntary financial counselling scheme, committing $6.15 million in the first year,” Ms Bligh said.
She added that financial counsellors play a vital role in helping people who are facing the most difficult moments in their lives.
“Financial counsellors get people back on track when they are experiencing the most difficult moments in their lives,” Ms Bligh said.
