Finance for Small and Medium-Sized Enterprises - DTI Home Page

Finance for Small and Medium-Sized Enterprises: A Report on the 2004 UK Survey of SME Finances
where it supplies
other forms of debt. Analysis of the number of different financial
products,
supplied by the main provider, is given later in this section.
Market shares
Now we turn to an analysis of market shares based
on data provided by businesses
about their main provider of finance.
of marke
dicates that the market we are looking at here is, principally, for liquidity
nt services.
42 In the following charts we report the degree
t concentration among the largest four providers. The previous analysis
in
manageme
In the following chart we look at the market shares of the top four providers in the UK
Figure 6.1: Market Shares of Largest Four Providers (UK)
22%
Top Four Providers Other Providers
Base: All SMEs N P = 3,625,416 (Unweighted N=2,500)
This chart indicates that
• The largest four providers account for almost 80% of the market.
In addition (not reported in Figure 6.1)
• The largest provider is the main provider to 1 in 4 SMEs.
• The two largest providers account for 42% of the market.
In comparison, Cruickshank (2000), using bank data on the value of loans and
overdrafts,
estimated that the top four banks account for 83% of the market. Our
figure of 78% is indicative of a slight fall in market concentration. 43
42
In contra st, previous analyses of market share have used bank data (see e.g., Cruickshank, 2000)
43
Whilst our figure is (statistically) significantly smaller than Cruickshank’s figure, it would be
incorrect to infer that the top four market share has fallen 5 points, due to the different methods of
calculating market shares.
78%
72