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Project Merlin: Banks miss small company lending target | Project Merlin: Banks miss small company lending target |
(40 minutes later) | |
The five main UK banks have missed their Project Merlin target for lending to smaller firms, but exceeded the overall lending target, British Bankers' Association figures show. | The five main UK banks have missed their Project Merlin target for lending to smaller firms, but exceeded the overall lending target, British Bankers' Association figures show. |
The banks said they met their overall government-agreed commitments last year, with gross new loans of £214.9bn against a target of £190bn. | The banks said they met their overall government-agreed commitments last year, with gross new loans of £214.9bn against a target of £190bn. |
But £74.9bn was lent to smaller firms, less than the £76bn target. | But £74.9bn was lent to smaller firms, less than the £76bn target. |
The banks blamed the shortfall on fewer firms coming forward for credit. | The banks blamed the shortfall on fewer firms coming forward for credit. |
A spokesman for the banks said demand for credit from small firms fell last year and "remains weak". | |
Under the government's Project Merlin deal, the five UK banks - Barclays, HSBC, Lloyds Banking Group, RBS and Santander UK - were to make it easier for smaller firms to access credit. | Under the government's Project Merlin deal, the five UK banks - Barclays, HSBC, Lloyds Banking Group, RBS and Santander UK - were to make it easier for smaller firms to access credit. |
The collapse of many smaller businesses during the financial crisis was blamed on banks' refusal to lend to viable companies. | The collapse of many smaller businesses during the financial crisis was blamed on banks' refusal to lend to viable companies. |
The £74.9bn the banks lent to small and medium-sized firms last year compares with £66bn in 2010. | The £74.9bn the banks lent to small and medium-sized firms last year compares with £66bn in 2010. |
'Challenging' conditions | |
The national chairman of the Federation of Small Businesses, John Walker, described the failure to hit the £76bn target for loans as "extremely disappointing". | |
"It is even more disappointing, given that the Project Merlin targets were set artificially low in the first place," he added. | |
"Now, more than ever, it is imperative that the government embraces plans for alternative sources of finance and puts in place its credit easing scheme." | |
A spokesman for the Merlin banks said: "This performance demonstrates the banks' commitment to providing businesses with the financial support they need to invest and grow and the significant progress made this year." | A spokesman for the Merlin banks said: "This performance demonstrates the banks' commitment to providing businesses with the financial support they need to invest and grow and the significant progress made this year." |
He cited last month's Bank of England Credit Conditions Survey, which said that the demand for credit from small businesses fell in three out of four quarters in 2011. | He cited last month's Bank of England Credit Conditions Survey, which said that the demand for credit from small businesses fell in three out of four quarters in 2011. |
The spokesman said: "The banks' efforts to encourage customers to come forward with borrowing proposals are set against this overall challenging economic environment. The business demand for credit remains weak." | The spokesman said: "The banks' efforts to encourage customers to come forward with borrowing proposals are set against this overall challenging economic environment. The business demand for credit remains weak." |
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