SYDNEY, August 7, 2018
Cameron Poolman, OnDeck Australia’s CEO, sat down with David Boyar and Paul Meissner from ‘From the Trenches’ for their latest podcast. They chatted about the role of Fintech in small business lending, growth in the space and what it means for the Australian market.
A recent Code of Lending Practice was introduced to the online lending market with the aim of increasing transparency to small business owners. OnDeck was at the forefront of industry governance in the US as a founding member of the Innovative Lending Platform Association (ILPA), which launched the global best practice SMART Box™ for small business in the US. OnDeck Australia has followed its parent’s focus on strong governance by becoming a founding signatory to the Code. OnDeck Australia has worked with industry body AFIA and five other online lenders to develop the Code, launched on 30 June 2018.
Pricing measurement currently differs between lenders – from Cents on Dollar (CoD), to Annual Percentage Rate (APR). OnDeck uses CoD as a pricing metric to help SMEs understand the total cost of their loan. The US SMART Box™ provides APR and CoD, which gives SMEs a more accurate comparison of their financing options and gives small business better information when making borrowing decisions. The six signatories have committed to have a SMART Box™ type product in place by year end, so SMEs can measure and compare pricing across lenders. The online lending market took 12 years to reach maturity in the US. By comparison, the Australian market is growing so quickly it’s likely to reach the same level of maturity in six years.
In addition to pricing transparency, OnDeck ensures its contracts are fully compliant with ASIC’s Unfair Contract Term (UCT) laws, which came into being at the same time OnDeck launched in Australia in November 2015. In March this year, ASIC made additional recommendations for inclusions in consumer contracts. OnDeck made the necessary changes to ensure its loan contracts also followed these recommendations.
The Government has been supportive of the industry with its push towards Open Banking and Comprehensive Credit Reporting. This helps to level the playing field for online lenders like OnDeck, to in turn support a successful small business sector in Australia.
Listen to Cameron’s podcast here: https://www.fromthetrenches.com.au/podcast/2018/8/6/5-in-5-cameron-poolman
