The head of the Australian Banking Association (ABA) has attributed the new figures which show economic confidence is on the rise within the country to the steady increase in small business lending over recent months.
According to ABA CEO Anna Bligh, this continued lending to small business between May and June demonstrates the “key role” the country’s banks have played and will continue to play in the recovery of the national economy.
Last month alone, lending to small, medium and family businesses increased by more than $2.2bn.
In total, banks have provided more than $258bn in small business loans since the start of the COVID-19 pandemic, which has helped facilitate the flow of new credit into the economy at a crucial time.
“These figures show there are some green shoots emerging in our economy and that’s a positive sign,” said Bligh.
“There’s a very long road, and plenty of hurdles to clear, but it’s encouraging to see small, medium family businesses slowly regaining some confidence.”
The increase in confidence over their financial future has seen many small businesses start making their loan repayments again. In June, the value of SME loan repayments on deferral dropped by more than $686m.
According to Bligh, the new figures that came out last week support Treasurer Josh Frydenberg’s observation there is early evidence of increased economic investment in Australia.
The ABA plans to continue working in partnership with the government and regulators to contribute to the financial confidence necessary to help the country through the challenges of the COVID-19 pandemic.
“Banks are already showing they are prepared to lend to small and medium enterprises so they can get back on their feet. Our banks understand the key role they play in re-opening our economy,” Bligh concluded.
