Australia's alternative finance industry is vowing to heighten transparency as policymakers continue to push for better small and medium-sized business (SMB) financial services.
Tech news source iTWire reports on Wednesday (Feb. 28) said the Australian Small Business and Family Enterprise Ombudsman announced a collaboration with BankDoctor.org and FinTech Australia. Together, the entities released a report detailing steps the alternative financial services market can take to boost transparency.
The report, titled “FinTech lending to small and medium-sized enterprises: Improving transparency and disclosure,” outlines best practices in promoting fair business with SMB borrowers.
According to FinTech Australia chief executive Danielle Szetho, the new report highlights the use of technology in boosting SMB lending transparency.
“Through the use of technology platforms which analyze rich, real-time business financial data and deliver easy-to-use and fast application processes, FinTech business lenders are making a real difference to small businesses,” Szetho said. “However, like many financial services products, lending contracts are complex and have the potential to be complicated and confusing. It's for this reason our lenders have decided to work together — in a historic move for Australia's FinTech industry — to help define best-practice transparency and disclosure.”
Small business Ombudsman Kate Carnell said in a statement that she supports the FinTech market for its efforts to improve transparency.
“This report informs both the FinTech industry and small business borrowers of the steps being implemented to allow an easy comparison of products, and to ensure loan agreement contracts comply with the unfair contract terms legislation," she said.
That legislation, which prevents banks from being able to terminate a loan as a result of a small business' circumstances, applies to traditional lenders as well. Last year, Carnell said getting banks to comply with those rules was “like pulling teeth.” The rules also require lenders to cut any unfair contract clauses that remove a financial institution's liability for “conduct, statements or representations they make to borrowers outside the written contract.”