In the midst of a systemic retreat, Australia’s big four banks, which have historically played a much greater role in building financing than their overseas counterparts, may see their market share decline from 85% to 70%.

That market share is being ceded to private lenders, who have stepped in to fill the lending vacuum. This is part of a growing trend of disintermediation which has been occurring in the Australian lending market in recent years: Much of the demand for credit from the private sector is simply unmet by the traditional banking intermediaries.

But while the Big Banks retreat was accelerated by the onset of COVID-19, indications that the country is taking control of the pandemic has relaxed lenders of all kinds. Both banks and non-banks are picking up activity, and we’re seeing a recovery from the lows of April and May.