Crunch hits non-bank lenders
As the credit crunch tightens its grip on the Australian economy, many non-bank lenders have been forced out of the market.
Indeed, Consult Magazine reports that in the last couple of months, many consumers may have found it difficult to get hold of personal loans or home loans as competition decreases and the remaining providers look to protect themselves against risk.
Greg Medcraft, boss of the Australian Securitisation Forum, warned that even if the Reserve Bank cuts interest rates, many banks will find it difficult to pass these cuts on to consumers on items such as personal loans and credit cards.
He explained that he could not remember a time when consumers faced such circumstances.
On the other hand, the Reserve Bank has said in a recent statement that while Australia has not been entirely immune against the financial flu gripping the rest of the world, fairly rigid lending practices have meant that there have been relatively few problems with people defaulting on their home loan repayments.