UK banks falling behind lending commitments

15 November 2011

Major banks in the UK have fallen behind their targets for lending to small businesses, new figures have shown.

Statistics published today (15 November) by the Bank of England revealed that the country's five biggest financiers are not currently on course to meet their goals in terms of making additional cash available to companies.

Earlier in the year, HSBC, Barclays, Santander, Lloyds and Royal Bank of Scotland struck an agreement with the government called Project Merlin, in which they pledged to provide the capacity for £190 billion worth of new loans to firms in 2011.

This included making £76 billion available to small and medium-sized enterprises (SMEs), but it has now emerged that so far this year they have agreed to just £56.1 billion in this area.

Recently, a spokesman from the British Bankers' Association indicated the lenders were "on track" to fulfil their targets.

However, John Walker, chairman of the Federation of Small Businesses, insisted that more needs to be done to make sure SMEs are benefitting from this initiative.

By Gary Cooper

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