The Australian Office of Financial Management has put its Australian Business Securitisation Fund investment program on hold, citing challenging conditions in the securitisation market and delays in creating a data template for the scheme.

It has called off a planned second round of investment proposals and will update the market on the scheme later in the year.

The ABSF was launched in July last year with A$250 million of government funding. Over four years it will receive a total of $2 billon of funding.

Its mandate is to invest in securities issued by warehouses and special purpose vehicles established by small business lenders, with the aim of supporting the provision of credit to the underserviced SME market and making the SME lending sector more competitive.

In August the AOFM issued a request for tender, inviting interested parties to submit tenders for the provision of investment management services for the ABSF.

In December it issued an invitation to market participants to submit proposals for investment by the fund and in April it announced that it was investing the first round of funds in securities issued by a warehouse vehicle sponsored by Judo Bank.

Yesterday the AOFM announced that work on a data template for the scheme was suspended in March.

“While conditions have improved in the Australian securitisation market since early April, they remain challenging. Moreover, the AOFM sees its mandate with regards to the ABSF as primarily an exercise in market development,” it said.

“This will be achieved through sponsoring the establishment of a track record in different types of SME lending under a standardised loan level data template.

“The AOFM believes that in the current environment this work [on the data template] should remain on hold.”

The work of the Structured Finance Support Fund, a COVID-19 relief measure in which the government is providing $15 billion to invest in structured finance markets used by smaller lenders, is unaffected.