The Government yesterday introduced legislation to establish the Australian Business Securitisation Fund - its initiative to make the SME lending sector more competitive.The ABSF will invest in securities issued by warehouses and special purpose vehicles, with the aim of supporting the ability of small lenders to grow and provide credit to underserviced segments of the SME market.Under the terms of the Australian Business Securitisation Fund Bill 2019, A$2 billion will be credited to the ABSF between 1 July 2019 and 1 July 2023. The first payment into the fund will be $250 million.The Australian Office of Financial Management will invest in authorised debt securities issued by warehouses. Authorised debt securities must be issued by a trust or a body corporate that is a special purpose vehicle.The underlying credit provided to each business must be provided predominantly for business purposes and be less than $5 million. The bill allows for other criteria and limitations to be set, depending on how the market develops.Ministers has power to make directions, including strategies and policies to be followed in making investments and decision-making criteria for making an investment.A ministerial direction cannot have the purpose of directly or indirectly requiring an authorised delegate to make a particular investmentThe fund will reinvest capital and earnings.