New research will aim to establish current trends and best practice in the growing fintech lending market to small and medium-size enterprises (SME).
Fintech small business lenders will be surveyed as part of a collaborative research project by the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) with industry organisation FinTech Australia and independent SME finance expert Neil Slonim from the BankDoctor.org.
Fintech lenders are an emerging alternative to banks for small business loans, often through seamless and highly automated online application, assessment and decision processes.
Ombudsman Kate Carnell said fintech lenders have potential to fill the gap left by traditional bank lenders in the marketplace, particularly as awareness, trust and confidence in alternative lending grows.
Ms Carnell commended the sector for being proactive to ensure best practice and transparency.
“But with rapid growth in the number of lenders and the variation of fintech products, it becomes more difficult for SMEs to make informed decisions about which products and lenders best suit their circumstances,” Ms Carnell said.
“The survey will collect information from fintech lenders that can shed light on some of these issues.
“Results will be published in a report to identify industry best practice and help SMEs to better understand their fintech borrowing options.
“The survey results will also inform fintech lenders how they can help SMEs by improving the transparency of their lending products and by clearly communicating the rates, costs, terms and conditions of their products.”
FinTech Australia CEO Danielle Szetho said FinTech Australia was pleased to work with the ASBFEO and the BankDoctor.org.
“This work will help us to understand how the industry is currently servicing SMEs and steps we might take as an industry to improve the SME community’s awareness and understanding of alternative lending products,” she said.
“What is clear is that banks have not been adequately servicing the SME community’s needs, and fintechs have stepped in with new loan products to help fill that gap.
“This is proving to be a very beneficial and cost-effective source of funding for SMEs. This research will help even more SMEs to invest in their growth and benefit from alternative lending products.”
Neil Slonim from theBankDoctor.org said “it is not easy for small business owners to assess whether borrowing from a fintech lender is the best option for them, and if so, which lender they should choose.
“There are around 30 fintech small business lenders now operating and their websites, through which they engage with their customers, all appear to be much the same.
“As a not-for-profit SME advocate we are pleased to be working with the ASBFEO and FinTech Australia to raise understanding and transparency in a sector which is becoming increasingly relevant to small business owners.”
For more information about the survey visit http://asbfeo.gov.au/consultation/fintech-survey
For the Ombudsman: Michael Gorey 0498 190 205
The BankDoctor.org: Neil Slonim 0414 440 866
For FinTech Australia: Mark Skelsey 0403 197 523