Raising the bar for SME lending
For those who work in the finance industry, there appears to be no shortage of lenders and loans in the marketplace. However, for those running Australia’s 2.1 million small and medium-sized enterprises, it can be difficult to see the wood for the trees.
With the intention of addressing this, in July six fintechs signed the Code of Lending Practice, a document designed to bring transparency and clarity to the online balance sheet lending space.
An initiative of the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) and FinTech Australia, key elements include the introduction of a pricing comparison tool allowing customers to compare the cost of unsecured loans from the signatories; an easy-to-understand loan summary; and a glossary of terms written in simple language.
It also acts to unify other directives set out by such bodies as ASIC, ACCC, APRA, the courts, and the new Australian Financial Complaints Authority (AFCA).
The code was signed on 5 July by Capify, GetCapital, Moula, OnDeck, Prospa and Spotcap, all of which helped create it, alongside the Australian Finance Industry Association (AFIA), SME advocate TheBankDoctor.org, FinTech Australia and ASBFEO. The signatories’ deadline for compliance is 31 December 2018.
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Source: Raising the bar for SME lending