Bankers Dip Into Business Lending Pool
Encouraged by signs that the recovery may be gaining traction, some bankers said they are planning to increase their small business lending efforts this year.
According to a survey of 409 bankers conducted by loan and credit training firm Omega Performance, 77% of respondents said they were likely to increase their small business lending activity. For those banks that don’t offer small business products and services, 78% said they were planning to actively pursue offering them.
“The temptation is for banks to steer clear of multiple, harder-to-understand small and middle market loans in favor of fewer larger, but safer, credits,” Golden noted. “This bias toward large organizations might minimize the risks for financial institutions in the near term, but it limits growth in the long term.”
Omega’s most recent research shows that globally the expectation of doing more commercial lending this year is consistent in the U.S., Canada, the Asia Pacific, Europe, Africa and the Middle East. Of those areas looked at, banks in the U.S. and Canada said they expect to do considerably less commercial lending at 3.3%, slightly ahead of the Asia Pacific at 2.4%. Banks in Europe, Africa and the Middle East topped the list at 7.1% for the same expectation.