AltFi’ is the new buzz word that is gaining a lot of traction in Australia, and has to do with Alternative Finance industry which is still at a nascent stage in the country. This is juxtaposed to the situation in the UK and US where the existence of AltFi has been for some years now (4-5 years).
The emergence transcends from the fact that Australian big banks have always enjoyed a greater pie of the market share in the lending zone, but the banks have been throwing many challenges for small and medium enterprises (SMEs) lately. These challenges particularly relate to longer than anticipated processing time, higher costs and complex credit assessment (depending on factors such as availability of personal collateral and banks’ manual way of collecting information). The banks thus have started paying more attention to larger lends and ignored the SMEs to a great extent (it is worth noting that Australia has about 2 million SMEs that employ close to 70% of the total workforce).