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Shaun Drummond, of The Australian Financial Review, recently reviewed this question as to the necessity and possible detriment of holding the Financial System Enquiry (Drummond S, Financial system ain’t broke, 29/01/14, AFR Capital Section).

He raises some important arguments in a balanced manner, though the subsequent title given to the article on the AFR website “Financial system inquiry a needless time waster” is not quite so balanced, nor particularly reflective of his arguments.

There are two issues he identifies, with regard to finance availability for SMEs, first that changes to ‘unfair’ capital imposts to smaller, regional banks and lenders will mean growth in the lending capability of those lenders, and secondly that direct online sources of capital, such as crowdfunding and peer-to-peer lending are likely to become more accessible to and beneficial in commercial finance.

The last issue of direct lending via online platforms is a popular topic of late and I can see it’s benefits in the near future for small businesses but struggle to see it working yet for medium sized ones.

I think Shaun also could have touched on direct lending from sources such as corporate superannuation funds.

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