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National Australia Bank Builds SME Lending Features

With home loan growth expected to slow to 4 percent in 2018, National Australia Bank (NAB) wants to build its business elsewhere, namely in SME lending.

A report in The Australian on Monday (July 31) revealed news that the NAB is adding new features to its small business (SMB) lending unit, QuickBiz, in an effort to build market share. This week, the bank is rolling out an extension of the online platform, enabling small businesses to borrow up to $40,000 in working capital, with plans to also add overdrafts and financing via credit cards to SMB borrowers.

According to reports, the FI will also introduce a pilot of its upgraded NAB Connect mobile app to help its small business customers handle bulk payments and authorize payments via their mobile device. Finally, National Australia Bank is also looking to streamline SME customer on-boarding, allowing sole traders to open an online account in about 10 minutes.

Australian regulators have been pressuring the nation’s top banks to improve their small business lending practices.

A report released by the Australian Securities and Investment Commission, and by the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), suggested top banks may be treating SME borrowers unfairly when it comes to working capital, failing to comply with borrower protection rules.

Top Australian banks have “substantial work to do,” the report concluded, with the ASBFEO’s Kate Carnell releasing a statement saying she was “gob-smacked” by the SME lending practices of large banks.

Part of the problem, regulators noted, is that banks are using confusing language in their contracts with SMEs that enable FIs to suddenly change the terms of a loan or remove themselves from being liable for behavior with those small businesses conducted outside that contract.

“Once again, repeated calls for the banks to amend their practices are falling on deaf ears, despite inquiry after inquiry highlighting major flaws in the way they treat their small business customers,” Carnell said in March, adding that in many cases, banks revised their SME contract practices but “made them worse and more convoluted.”

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