The Morrison Government today announced an investment of up to $15 billion to enable smaller lenders to continue supporting Australian consumers and small businesses.
The Government’s actions will enable customers of smaller lenders to continue to access affordable credit as the world deals with the significant challenges presented by the spread of coronavirus.
Small lenders are critical to Australia’s lending markets, often driving innovation and providing competition for larger lenders.
This funding will complement the Reserve Bank of Australia’s (RBA’s) announcement of a $90 billion term funding facility for authorised deposit-taking institutions (ADIs) that will also support lending to small and medium enterprises.
Combined, these measures will support the continued ability of lenders to support their customers and in doing so the Australian economy.
The Australian Office of Financial Management (AOFM) will be provided with an investment capacity of $15 billion to invest in wholesale funding markets used by small ADIs and non-ADI lenders.
Legislation to enable the economic measures will be introduced in the week commencing Monday, 23 March 2020.
Greg Moshal, Prospa CEO said the Government’s support of non-bank lenders to help small businesses deal with the significant impact of COVID-19 on their livelihoods was welcomed.
“As innovators, we are well placed to distribute Government funding quickly without any long application processes or excess documentation. A fast response is exactly what small business owners need right now. Our Government has stepped up and provided that fast response and we stand ready to do the same.
“These measures will also have a direct and tangible effect on Australian jobs and the economy. By maximising their cashflow, small businesses like the ones we serve can continue to pay their staff and suppliers and crucially, keep their businesses and the economy running. Prospa’s research shows that a $1 billion in lending by us generates a corresponding flow of money through the economy leading to a $4 billion increase in GDP and 57,000 jobs maintained. That’s the kind of help that Australia needs right now.”
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