PM and Treasurer urge banks to lend to viable SMEs

Prime Minister Kevin Rudd and Federal Treasurer Wayne Swan say they are talking with the leaders of Australia’s four major banks to remind them they have an obligation to lend to viable firms.

Swan was interviewed for an episode of Four Corners that is set to air on ABC television tonight, examining the impact of the financial crisis on individuals and businesses.

There is strong anecdotal evidence that banks have clamped down on lending to sectors particularly at risk from the crisis, including financial services, property, manufacturing and retail.

Swan has told the program that bank deposit guarantees the Government provided last year should ensure that profitable businesses can continue to borrow money.

“If there are viable businesses that have an adequate income and are profitable into the future, then they should be being supported by the banking system which has received, after all, the support of the Australian Government,” he said.

“I do believe there may be some sectors where the flow of credit is not what it should be, and we are seeking to map that out. The Prime Minister and I are having a discussion with the four major banks about how that can be rectified and what must be done.”

Swan says the Government is keen to hear from any business owners who believe they have been badly treated by the banks.

“We would be very interested in hearing from companies if they think they have been dealt with harshly and unfairly by the banking system, and if that would lead to destruction of those businesses and increasing unemployment – well, we want to know about it,” he said.

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