UK banks 'remain very risk averse'

20 September 2012

British banks remain extremely reluctant to lend to businesses as the country continues to battle against the impact of a double-dip recession.

That is according to Mike Cherry, national policy chairman at the Federation of Small Businesses (FSB), who believes financiers need to make their criteria for loans to companies more lenient sooner rather than later.

During a BBC podcast on small business lending, Mr Cherry explained it is clear that banks are "very risk averse" even though the government has created several initiatives in order to encourage them to lend more freely.

"You've had Project Merlin, you've had the National Loan Guarantee Scheme, you've had Funding for Lending and quite frankly, enough is enough," he noted.

The FSB official went on to say that "business after business" is approaching his organization to complain that they are unable to access the finance they badly need in order to grow their company.

By Asim Shah

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