Bank lending targets set to disappoint ministers

Britain’s biggest banks are set to increase the amount of money they lend to small businesses – but not by as much as the government had hoped.

The Coalition has been locked in a series of secret discussions with the country’s leading banks under the codename ‘Project Merlin’ for several weeks, and the talks are set to conclude imminently.

During the talks – which have involved HSBC, Barclays, Royal Bank of Scotland and Lloyds – the Government has pushed for the creation of a small business lending target, which will oblige Britain’s financial houses to furnish a specific sum for the country’s emerging firms.

It is believed the banks have agreed to lend up between £150m and £180m to small firms this year; this is a significant increase on the amount loaned in 2010, but far less than the £200 million the Treasury was hoping for.

Ministers had hoped that, by increasing the availability of funds for new and emerging enterprise, they would encourage a burgeoning economy built on entrepreneurial spirit – a vision which prime minister David Cameron has often discussed.

Read more: http://www.growingbusiness.co.uk/bank-lending-targets-set-to-disappoint-ministers.html

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