Small businesses must be allowed to think big

SMEs need help to compete with rivals in Europe, writes Bill Hobbs

THE dramatic decline in domestic banking activity illustrates the need to redirect banking activity to funding the development of an export-orientated, medium-sized indigenous businesses sector.

While the savings rate is increasing, household deposits are declining. The savings rate measures the percentage of disposable income not being spent on consumption. This money is either being stored as bank savings or used to pay down debt. And if borrowing to fund consumption drops, the savings rate increases.