Bibby Financial Services and inTouch Home Loans have indicated market opportunities remain strong in the debtor finance sector, despite a decision by the Commonwealth Bank to withdraw its debtor finance service.
Bibby said in a media statement that small to medium enterprises should not misinterpret the bank’s decision to exit as a question mark over the demand and growth of the product and industry, which grew 6.6% over the year to March 2011.
Bibby's managing director Greg Charlwood said that SMEs are in greater need of flexible forms of working capital, and that the group did not expect CBA's withdrawal to adversely affect the market in Australia.
InTouch Finance announced this week that it would launch its own debtor finance product immediately, following "last week's decision by the Commonwealth Bank to turn its back on more than 400 business owners around the country".
InTouch founder Paul Ryan said that the group will offer the new product, and that it was time "Australian business owners were given better financial options which will help them realise their business objectives and vision".
“We’re talking about a 60 billion dollar industry so the more choice and alternatives business owners have the better," Ryan said. "With the Commonwealth Bank withdrawing from the sector last week,and ANZ pulling the pin last year, you have to wonder whether the other banks will follow suit.”
A statement from CBA said that the bank has undertaken a strategic review of this product offering and does not believe it matches its risk appetite. The product was withdrawn in mid-May.
"The bank will look at alternate opportunities for the extremely small number of customers that currently utilise this product, including other products and services that may suit their needs," the statement said.