"Financing projects from £50,000 to £100 million"

Banks to publish more data as lending to businesses falls

Banks to publish more data as lending to businesses falls

The Treasury wants to see more data published after new figures showed that UK banks have cut back on small business lending in the majority of postcode regions.

Only 22 of the 120 regions reported an increase in lending to small businesses last year, according to figures released by the British Bankers’ Association (BBA).

This is despite the onset of the Funding for Lending Scheme, launched in August, which has made cheap funds available to banks for this purpose (read more).

However, more recent data shows a rise in net lending of £172 million in June, which suggests that the proceeds of the scheme could be impacting the market.

Chief Secretary to the Treasury, Danny Alexander, has pledged to increase the scope of the regional lending data in the hope that it will boost competition from regional lenders in areas where lending has been negatively affected.

By the end of this year, banks will reveal a more detailed breakdown of lending figures by postcode, after reaching a voluntary agreement.

"It is a major step forward in terms of transparency and should encourage competition by helping smaller lenders to identify gaps in the market and allowing businesses to hold their local bank to account where they aren't lending," Mr Alexander said.

The BBA defended its members by claiming that businesses had shown less interest in borrowing.

"In these difficult economic times many businesses are building up large cash reserves and paying down debts rather than taking on more borrowing," said chief executive, Anthony Browne.

"That is why the majority of regions are net depositors, saving more money than they are borrowing."

Thursday, 25 July 2013 12:22
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