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Loans to the healthcare sector have significantly bolstered the non-bank’s loan book growth, according to the SME non-bank lender.
Non-bank lender Banjo Loans has revealed it achieved a 60 per cent year-on-year loan book growth across the 2023 financial year, with loans to the healthcare and social assistance sectors growing 250 per cent in the last six months.
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The Melbourne-based lender has revealed that the significant growth in the healthcare and social assistance sectors was fuelled by pharmacy fit-outs and high-tech shops, with pharmacy owners “one of the main businesses leading the charge for loans” as they “work to modernise their shops”.
It noted that federal government changes to bring in 60-day prescriptions (up from 30 days), were encouraging pharmacies to look for more efficient processes to “offset the expected drop in revenue”.
Indeed, Banjo Loans chief executive Guy Callaghan said pharmacy operators are seeking loans to upgrade their businesses with new technology such as “robotic arms for dispensing medication”.
Mr Callaghan stated: “This increasing competitiveness in the pharmacy sector, combined with cost challenges around delivering on the government’s medication initiatives, has meant pharmacy owners need to seek operational efficiencies.
“One way to do this is to incorporate new technologies, like robotic arms, which are programmed to retrieve medications and deposit them into patient-specific boxes. This is becoming more common as pharmacists upgrade their shops for the 21st century.
“Pharmacies perform a vital role in our society, especially as the population ages, so it’s important they can obtain funds when they need it to upgrade their services to meet growing demand.”
Aside from increasing loan applications from healthcare and social assistance sectors, Banjo also saw an uptick in demand from:
- Administration and support services.
- Electricity, gas, water and waste services.
- Education and training.
- Transport, postal and warehousing.
It also saw an increase in applications for sectors that have been under more stress this year, including those exposed to the fall in discretionary spending, such as retail trade, and construction and manufacturing.
According to the non-bank, 90 per cent of its business over FY23 was generated through the broker channel in FY23.
The non-bank lender CEO added that SME owners could often face difficulties when seeking loans from major banks, which was why they turned to non-bank lenders.
“We’re in the unique position where we have the time and expertise to gain an understanding of the fundamental health of established businesses coming to us for loans, which they may not get from the major banks,” Mr Callaghan commented.
He concluded that “small business faces significant challenges this year from inflation, rising supply costs and increasing interest rates”.
“A non-bank lender such as Banjo has the ability to help businesses manage these challenges through lending, which we’re proud to do,” Mr Callaghan commented.
[Related: Almost two-thirds of SMEs struggling to secure funding: Banjo]
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