RBA Flags Surging Non-Bank Credit as Banks Stay Strong — What Borrowers Need to Know

The Reserve Bank of Australia has noted that while major banks remain well-capitalised with low loan losses, non-bank credit growth is accelerating — a signal that more Australians are turning to alternative lenders for finance.

The RBA's assessment, highlighted in The Adviser's latest reporting, comes as the cash rate sits at 4.10% following the Board's March 2026 decision to raise rates by 25 basis points. Banks are in a position to absorb financial shocks, the RBA said — but the real story is the heat building in the non-bank sector.

Why Non-Bank Credit Is Growing

Non-bank lenders have steadily gained market share as bank lending criteria have tightened under successive rate hikes. Key drivers include:

• Self-employed borrowers unable to meet bank income documentation requirements
• New migrants and PR holders without sufficient Australian credit history
• Property investors facing tighter bank serviceability assessments
• SME owners seeking more flexible commercial finance

According to CoreLogic and RBA data, non-bank lending as a share of new mortgage originations has grown consistently over the past 18 months.

The Stability Picture

The RBA's positive assessment of bank stability is actually good news for non-bank borrowers. A stable banking system provides a foundation for the broader credit market to function efficiently. Non-bank lenders often warehouse their loans in securitisation markets that are underpinned by a stable financial system.

APRA's parallel reforms to bank capital and liquidity frameworks — announced in March 2026 — are also designed to strengthen, not restrict, the overall lending ecosystem.

What This Means for Non-Bank Borrowers

If you're considering a non-bank loan in this environment, here's what to know:

1. Non-bank rates reflect the market — Non-bank rates typically sit 0.5–1.5% above major bank rates, but the flexibility and approval rates justify the premium for many borrowers
2. Alt Doc remains accessible — Self-employed borrowers with BAS statements or accountant letters can still access competitive rates through lenders like MPFG Capital
3. Non-bank credit is growing, not contracting — The RBA's report confirms non-bank lending is a healthy, growing part of Australia's financial system

For borrowers who have been turned away by major banks in 2026, the message is clear: the non-bank sector is open, well-funded, and actively lending.

MPFG Capital is a non-bank lender specialising in Alt Doc, commercial, and bridging finance. This article is general information only and does not constitute financial advice.