The Australian Office of Financial Management is calling on all small-business lenders to complete its survey on the SME lending market, which aims to establish a baseline for monitoring market development over time.
The Australian Office of Financial Management (AOFM) has launched a major new survey of the small and medium-sized enterprise (SME) lending market to help establish a baseline of the current structure of the SME lending space and help monitor its development over time.
The survey aims to collect SME lending market data and feed into the work and investments of the new Australian Business Securitisation Fund (ABSF), a $2-billion fund that has been launched to support the provision of finance to small to medium enterprises (SMEs) on “more competitive” terms.
To help the AOFM implement its investment strategy of the ABSF and establish a market census on business lending, the office is now asking SME lenders for “empirical data” on their offerings.
This includes data on their loan book size, product range, assets under management, sources of income, historic arrears and loss rates, the range of interest rates charged and a breakdown of security types.
This data aims to also help the AOFM apply the strategy for the ABSF, which is now open for investment proposals from SME lenders.
As previously announced, $250 million is available for investment (made in securitisations of loans made by SME lenders, including via warehouse facilities) in the current financial year, and a further $250 million in July next year. From 1 July 2021 to 2023 inclusive, the available funds will grow by $500 million per annum.
According to the office, the body will take into consideration whether lenders have previously participated in this SME lending market survey when comparing future investment proposals.
Releasing the survey, the AOFM commented: “The AOFM has indicated its intention to collect SME lending market data in line with its annual call for proposals. This exercise will serve two purposes: to map out the market with greater detail, which will allow the AOFM to implement its investment strategy more effectively, and to establish a baseline for monitoring market development through time.
“The AOFM strongly encourages all SME lenders to complete this survey, regardless of whether they are submitting an investment proposal…
“One of the key opportunities from the ABSF program is to develop the SME lending sector for the benefit of all participants. While this will take time, broad market support for this aim will facilitate more effective change,” it said.
The deadline for receiving SME survey submissions is midday (AEDT) on 15 January 2020, as is the deadline for receiving investment proposals.
The AOFM expects to announce its decision for this first round of ABSF investments late in the first, or early in the second, quarter of 2020.
Further details around the proposal process and SME lending market survey can be found on the AOFM website.
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.
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