Banks Pledge To Lend Extra GBP94 Billion In Business Loans

Fri, 26 Mar 2010

Royal Bank of Scotland (RBS) and Lloyds Banking Group have agreed to make an extra £94 billion in loans available to struggling businesses over the next year as part of the government’s plan to boost the UK economy.

In his budget report, Chancellor Alistair Darling said the part-nationalised banks have pledged to lend almost half the total amount of new business loans to small and medium-sized enterprises (SMEs).

The extra funding marks a significant rise from the level of loans made available by the banks over the past year.

"In return for support during the financial crisis, we have made banks accept their obligation to lend more," he said. "In the past 12 months, RBS and Lloyds, which make up half the market, have lent 38 billion pounds to small and medium sized businesses."

"There are still companies who are being unfairly denied credit and feel that they are powerless to challenge the decision. I want to change this position and give them the right to have their credit complaints examined."

Mr Darling also revealed that the Financial Services Authority "will improve and speed up the licensing process for new banks" in order to increase competition in the banking sector.
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