A key part of the Reserve Bank’s response to the COVID-19 pandemic had no “statistically significant” impact on small business lending, a review has found.
, and businesses’ general fear of taking on debt during a recession appear to have undermined the program’s intent.
The facility was set up amid concerns the country’s banks would both struggle to access credit at a competitive price and would restrict lending to small and medium-sized businesses., RBA governor Philip Lowe said its main aim was to provide an incentive for lenders to support the business sector. “We also find no statistically significant effects on aggregate business credit growth for eligible banks that accessed the TFF compared to banks that did not draw down.”They said many small and medium-sized businesses had little appetite to take on new loans, partly because of ongoing uncertainty about the economic outlook, while other government support programs allowed businesses to increase their cash buffers.
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