ANZ (Australia and New Zealand Banking Group), one of the country's major banks, has informed that Senate Economics Reference Committee on small business financing that the number of companies who are behind on loan repayments had jumped amidst the difficult economic situation.

ANZ told the Senate that more and more small firms will face difficulties in paying off their loans, stressing that "the proportion of customers who are 90 days or more overdue with their repayments has increased across all business segments."

The bank said that while conditions are stabilising in many areas, they still expect delinquencies to shoot up further as recovery is achieved even as the Australian Chamber of Commerce and Industry (ACCC) has called on Australian banks to refrain from hiking lending costs while the effects of the worldwide financial turmoil is still in place.

ACCC chief executive Peter Anderson argued that banks have already reaped more than enough and their "bank margins were already fattened at the expense of small business during 2009, with rate rises passed on in full but not the full value of rate reductions."

Also, the Council of Small Business in Australia is batting that the unit pricing system enjoyed by the retail industry must be extended to small business loans too, which would require banks to divulge the fees they impose on small enterprises.

The council said banks usually charge up to 15 cents for every transaction by small business owners while giant retailers were afforded free services owing to their huge and volume transactions.

For its part, the Reserve Bank of Australia has manifested before the Senate committee that it is upbeat that recovery in the small business lending market is underway amidst mounting indicators that the economy is strengthening further.

It also noted that the country's major banks have solidified their market shares with takeover of smaller banks during the global financial crisis and cited as glaring examples the 2008 Westpac merger with St. George and the Commonwealth Bank's acquisition of Bank West in Perth, which effectively eliminated competition in the banking industry.