In 2004, an ANZ Bank survey established that 18% of all adult Australians had a personal loan. The Federation’s members provide personal loans to a portion of that 18%. Significantly, within that portion, 88% of the borrowers do not have access to the ANZ, or any other banks, for such personal loans.
Over the last decade, this segment of the lending market has been abandoned by all the banks and other mainstream lenders, because these institutions can make much greater profits, with less risk, concentrating on lending to the big end of town, providing extensive credit card services and home loans with terms over many years.
The Federation believes the impact of the regulatory regime proposed should not be underestimated. The Amendment Bill and Regulation incorporate significant changes that will impact on many aspects of the day to day conduct of the microlending sector of the Australian finance industry.
