The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price has nudged into the green from the opening of trade on Monday.
ANZ shares are on the move as the banking giant eyes its next moves in commercial lending after the Australian Treasury extended its small-medium enterprise (SME) recovery loan scheme.
Let's dive in to understand what's at play here.
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Government fiscal assistance props the market
The Australian government announced the SME recovery loan package last year on the back of the lockdown measures to curb COVID-19.
Borrowers can access up to $5 million with the government guaranteeing 80% of the loan amount. There are both secured and unsecured loan offerings.
Originally, it was intended for businesses with a turnover of less than $250 million which had received the JobKeeper fiscal stimulus and support package between January and March this year.
However, the government has since removed those requirements and opened up the loan criteria. The scheme is now extended to basically any SME with a turnover of less than $250 million that's been impacted by COVID-19 or wants to expand its operations.
The funds can then be used to support investment decisions, even to make acquisitions and refinance pre-existing debt.
ANZ jumps on board
In view of the government's decision to extend the loans, ANZ has jumped at the opportunity. The bank looks set to help SMEs in growing their operations as we navigate out of the pandemic.
ANZ's Isaak Rankin, head of commercial and private banking, believes the scheme will allow businesses with "good prospects" to "rebound and grow", according to reporting from The Australian.
The previous scheme's structure was too restrictive, Rankin is reported as saying. However, he says businesses now have more "confidence and predictability" in the future with access to the scheme.
More business confidence, coupled with easier access to credit, could stem a robust recovery for SMEs, according to Rankin. In addition, people will start to invest when businesses "have access to funds". This forms the flavour of the "rebound we (ANZ) would like to see", Rankin reportedly said.
As such, ANZ believes the government's loan scheme is "one of the building blocks" towards achieving this growth and will be ready for a lending blitz in the coming months.
The SME recovery loan scheme ends on 31 December 2021, for reference.
ANZ share price snapshot
The ANZ share price has climbed 22% this year to date, extending the gain over the previous 12 months to 57%.
These results have outpaced the S&P/ASX 200 Index (ASX: XJO)'s return of around 25% over the past year.
Despite this, ANZ shares have slipped 6% into the red over the last month.
