Judo Bank in partnership with East & Partners
A tumultuous year for lives and businesses yet, despite all the claims of support, a glaring hole remains in banking service standards for Australian SME businesses. Less than a year after gaining our banking license, Australia was met with the worst recession in a generation and a public health crisis that shook the world.
The 2021 SME Banking Insights Report is the third in a series undertaken by Judo Bank, and highlights once again, ongoing gaps in lending, relationship quality, and ultimately trust that SMEs are experiencing from the major banks in Australia.
In a year when they needed support the most, Australian SMEs with a turnover of $1 million-$20 million faced a widening gap in their lending needs of $94.3 billion, up $4.6 billion from 2019. Our research this year was expanded to also include businesses with a turnover of $20 million - $50 million, but the data told a similar story, revealing a $119.2 billion lending gap for SMEs in this category.
If there was ever a year for the major banks to step up and fully support SMEs, it was 2020.
Government support was readily available and abundant in response to the COVID crisis through a range of targeted measures such as improving Responsible Lending laws and greater access to low-cost funding for ADIs and non-bank lenders.
Yet, despite the admirable efforts by the government, businesses that form the backbone of Australia’s economy were left out in the cold yet again by the major banks during the pandemic, with a retraction in SME lending over the period.
In fact, this report found that one in four SMEs were unable to secure funding in 2020 during the pandemic.
It is sadly unsurprising, therefore, that SMEs’ trust in the big banks has fallen even further, from an already low 2.4 on a 10-point scale in 2019, to 2.26 in the last year.
What remains clearer now more than ever, is that broader business banking practices need a fundamental rethink – especially as we face the challenges of recovery and operating in a world reshaped by COVID.
Australian SMEs deserve a bank that believes in them, that understands them, and that boldly backs them in the face of adversity and is dedicated to their success now and into the future.
That’s where Judo comes in. Purpose built to support SME businesses.
As we continue to bring back the craft of relationship banking, our goal is to challenge and disrupt the SME banking market with the sole purpose of providing SME businesses with the funding they need and the service they deserve. We are on a mission to become Australia’s most trusted SME business bank, and like previous years, the results of the 2021 SME Banking Insights Report reinforce the critical need for a better alternative to the incumbent banks.
Click below to read the SME Banking Insights 2021 report.