Neobank’s success “debunks” popular claim

by Madison Utley20 Jan 2020

In the nine months since securing its full licence, Australia’s first SME-focused challenger bank has lent over $1bn to small and medium sized enterprises nationally – discrediting the myth perpetuated by the major banks. 

Judo Bank co-CEO Joseph Healy explained, “The big banks have claimed that their ability to lend to Australian SMEs has been hampered by tightening lending standards, arguing that there is a lack of demand for credit from small and medium sized businesses.

“The fact that a challenger bank like Judo is able to lend over $1bn to SMEs within nine months of receiving a banking license debunks that particular claim.”

Conversely, Healy believes Judo’s rapidly expanding loan book is “further confirmation” SMEs have been starved of credit by the big banks.

“The truth is our major banks gave up on SMEs long ago,” he said.

“This is reflected in the growing finance gap uncovered by our own research, which found that unmet credit had ballooned from $83bn to $90bn in the 12 months to September 2019.

“As Australia’s first dedicated SME Bank, we’re here to help SMEs access the funding they need, when they need it, and we will continue to rapidly expand our loan book to ensure Australian SMEs have access to vital funding.”

Around 95% of the funds Judo has loaned to SMEs has come from term depositors at the neobank.

The SME loans written since receiving its full banking license have spanned a broad range of industries, “from publicans in country NSW to beauticians in Melbourne’s city-centre”.

In September 2019, LinkedIn named Judo Bank the Top Startup in Australia; company’s were chosen based on their rapid growth, industry disruption, and impact on the way Australians work and live.