Credit Demand Amongst Australian SME’s Declines Sharply

Post by Sharat on September 3, 2010 · Under Australian Economy, Business News, banking · Comment 
Credit Demand Amongst SME’s Declines Sharply

The demand for credit coming from Australian small businesses declined sharply during June, with asset finance demand plunging 21 per cent.

Market research firm Veda Advantage, which publishes the commercial credit index, the result of which show that demand by SME’s during the June quarter fell by 5.6 per cent compared to the same time period during the previous year, and also fell by another 2.1 per cent in July.

Nearly 90 per cent of all Australian businesses are SME’s with annual turnovers of less than $1 million. according to research DBM Consultants.

The results of the index published by Veda stands in sharp contrast with the results of a survey undertaken by investment bank UBS, which polled chief financial and risk officers of banks.

The UBS poll results suggest that overall credit demand in the SME space has grown somewhat in the half year ending July, and was expected to increase further in the future.

Veda’s index has tracked 6.3 million credit enquiries since 2004, and analysed demand across all account types.


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