The Australian Bankers’ Association has welcomed the report into small-business lending practices released by the Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer MP.
“Small businesses drive economic growth and jobs, and having access to finance is key to their success,” ABA Chief Economist Tony Pearson said.
“Banks have heard the problems raised by small businesses and farmers and are focused on making banking better for them. This includes being more transparent and flexible in loan arrangements, and setting new standards on appointing receivers and valuation practices. The ABA is also working with small-business organisations to make sure they have the information they need to manage and grow their businesses, including revamping the existing Financing Your Small Business website,” he said.
“The issues raised by Australian Small Business and Family Enterprise Ombudsman Kate Carnell in this report are important. Alongside this, the Code of Banking Practice is currently being independently reviewed (Khoury Review).
“We expect the report of the Khoury Review to be published shortly, and we aim to respond to the recommendations, as well as those from the Carnell Review, by the end of this month. The ABA will make changes to the Code to make sure our commitments to small businesses are clearer. We’re looking at having a separate section for small-business lending and how we can improve the transparency of loan terms and conditions.”
Pearson said the industry supported giving more help to customers when things go wrong.
“The ABA supports simplifying the current external dispute resolution system, creating an easier ‘one-stop-shop’ model and expanding the scheme so more small businesses can have complaints heard without needing to use the courts. At the same time, banks are improving their own complaints handling processes and appointing new dedicated customer advocates. Six banks have already appointed their customer advocate, with the other banks committed to have theirs in place by April,” he said.
“The ABA is pleased the report recommends a national approach to farm debt mediation. We have been advocating for some time to have a nationally consistent and mandatory approach to mediation that helps farmers in financial difficulty, which is modelled on the existing NSW and Victorian schemes. This would make it simpler and fairer for farmers to get help when they need it most,” Pearson added.
This week, Australia’s leading banks launched a Better Banking program to deliver better products and services to customers, building on last year’s reforms that address concerns with the culture in banks.
Former Auditor-General, Ian McPhee AO PSM, is overseeing the implementation of some of these reforms in his role as independent expert. He has been providing detailed quarterly reports to the public on where the industry is up to, including how individual banks are progressing.
“The ABA recognises the importance of customers and stakeholders having confidence in the changes the industry is making. We will ask for more detailed information in the next report about individual banks’ progress,” Pearson said.
More information on Better Banking is available at betterbanking.net.au.
Inside Small Business