Non-bank lending is performing extremely well, according to the Reserve Bank of Australia.
In positive news for brokers, the RBA has released its latest Financial Stability Report, pointing to trends the mortgage industry needs to look out for this year, in particular the rapid growth of the non-bank lending sector.
“While it is only a small percentage of the home lending pie, the 20% growth in household credit given by non-bank lenders show that customers are looking for other solutions with excellent customer service and efficient turnaround times,” said Bridgit CEO and co-founder Aaron Bassin (pictured), who was commenting on the RBA report.
Bridging loan company Bridgit specialises in bridging loans and offers same-day approval to consumers through proprietary technology, with its focus on assisting homeowners looking to purchase their next property quickly and seamlessly.
Bassin said brokers could offer solutions to customers and capture a growing customer base that expected more financial flexibility and smarter lending solutions to suit specific needs.
“The non-bank lending space is very competitive,” Bassin said. “Fintechs and start-ups are popping up everywhere to plug the gaps left by traditional lenders.”
Bassin said the rise in non-bank lenders would keep increasing as more customers saw the benefit of the bespoke products non-banks offer.
“For example, we offer the best bridging loan solutions with fast approval that give every day Australians the ability to buy their dream home,” he said.
Bassin said the rise of the non-bank lenders outlined in the report did not come as a surprise.
“It’s something we’ve been seeing on the ground as the popularity of our service continues to accelerate as borrowers look for better lending solutions to help them navigate a property market that is currently in flux,” he said.
The CEO said it was pleasing to see the financial resilience of the household sector was strong.
“While there are understandably question marks over interest rate rises, the broad-based growth in housing prices and high saving rates reflects the stability and resilience we are seeing from our customers,” he said.
Bassin said further growth in the non-bank sector would be inevitable and would be a bigger part of the Australian household borrowing ecosystem.
“Non-banks have the advantage of carving out a niche in the property industry, focusing solely on this, translating into a higher standard of customer experience and being able to service customers who are often turned away by mainstream lenders,” he said.
By having such a wide breadth of products, Bassin said institutional lenders would have difficulty in meeting the demands and expectations of customers.
“It makes sense that the 5% of total lending currently owned by non-bank lenders will continue to grow,” he concluded.
