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Funding to aid smaller lenders during COVID-19

The ACCC has granted interim authorisation for members of the Australian Securitisation Forum (ASF) to work together to assist smaller lenders to maintain liquidity and issue loans to consumers and small businesses during the economic disruption caused by the COVID-19 pandemic.

Funding to aid smaller lenders during COVID-19
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  • Maja Garaca Djurdjevic
  • April 09, 2020
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This follows the announcement of the federal government’s $15 billion Structured Finance Support Fund (SFSF), which will allow smaller authorised deposit-taking institutions (ADIs) and non-ADI lenders to access funding at competitive prices. The SFSF will be administered by the Australian Office of Financial Management (AOFM).

“The Structured Finance Support Fund is likely to be more quickly and effectively implemented when members of the ASF are allowed to work together to support the Australian Office of Financial Management in administering the fund,” ACCC chair Rod Sims said.

“Many Australian smaller businesses and individuals rely on small lenders. Quick and effective implementation of the SFSF will help ensure that small lenders can continue to support these businesses by offering affordable credit during this very difficult time.

“It’s also crucial that competition in the loans market in Australia is maintained. The competition provided by small lenders needs to be supported to help mitigate the economic impact of COVID-19.”

The ACCC has authorised the ASF and its members to discuss how the AOFM should administer the SFSF, including providing their views to the AOFM about developing measures for issuing new debt, arranging appropriate funding arrangements, allowing for hardship relief for borrowers and ensuring the continued flow of funding to smaller lenders. 

“It is important to note that ASF members are not authorised to exchange information about margins, costs, repayment terms or specific offers to customers. This is aimed at ensuring competition between lenders continues,” Mr Sims said.

Having granted interim authorisation for the arrangements, the ACCC will now seek feedback on the application for final authorisation, which is sought for a period of 12 months. 

 

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