The government’s third revamp of its unpopular business loan guarantee scheme will qualify a much larger range of small and medium businesses to borrow than were previously eligible, banks and fintechs say.was launched in October 2020 to assist SMEs which had been adversely affected by the coronavirus pandemic but has seen low uptake with only 77,500 loans worth around $6.8 billion approved.
MoneyTech is an accredited lender under the scheme and chief executive Nick McGrath said the fintech had lent $50 million in loans under the scheme but expected to do the same again under the expanded scheme between October and Christmas. “It’s a great scheme because what that does is it allows us to take a more commercial approach to who we do and don’t give money to,” he said. “We’re still taking 20 per cent risk on every loan so it’s not dumb money that we’re handing out.”, said the bank had lent slightly less than $40 million through the scheme but expected loans to soar under the expansion.
Earlier this month NAB chief executive Ross McEwan defended the bank’s adoption of the scheme and told the House of Representatives standing committee on economics many of the NAB’s customers had opted to extend their overdrafts rather than take a new loan under the scheme.
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