The medium term and the development of Asia As is now well understood, Australia has come through the global downturn in good shape. Not only has the business cycle here been relatively muted compared with elsewhere, but our medium-term prospects look to be brighter than those of most other advanced economies. They also look brighter than they did a decade ago.
As the small businesses cannot offer adequate collateral, the banks are unable to determine whether the borrower possesses technical, managerial and marketing skills that will allow him to generate adequate cash flows and repay the loan on time. The process of financial intermediation therefore breaks down for the SME borrowers.