Britain’s major banks have committed to lending small businesses £70 billion over the course of the New Year as part of efforts to stop exchanges with ministers.
The pledge was made the leading top executives of the leading five UK banks along with Chancellor George Osborne and Business Secretary Vince Cable. After the meeting it was decided that £200bn would be dispersed to business customers over the course of 2011 a portion of which would be dispersed to the small businesses.
In attendance at the meeting were the heads of Lloyds Banking Group, HSBC, Statander UK, Barclays, and the Royal Bank of Scotland.
The figure is roughly largely than last year showing a 10% increase over what banks lent to SMEs during 2010.
Therefore, when you account for inflation rates and the projected growth of the economy over 2011 the lending may not be adequate to offer SMEs room for growth over the year. However, it is hoped that the increase will help settle the complaints of ministers that there is not enough free credit available in the economy.
This move is of large significance because it will be the first time that bank lending will not be supported by taxpayers and will still have to meet the same lending targets from before the economic fallout.
The tone of the meeting was said to be upbeat with the banks agreeing that they need to commit to the further recovery effort in terms of lending and credit.