SME Finance Policy Guide

G-20 SME FINANCE POLICY GUIDE
13
SME Lending Targets in the United Kingdom
In February 2011, the Merlin Agreement was established between the UK Government and the major UK banks – specifically
Barclays, HSBC, LBG and RBS, and Santander - recognizing their responsibility to support economic recovery
in the United Kingdom. The agreement sets lending targets of around £190 billion this year, including £76 billion
to small firms. The Bank of England will monitor whether the loans targets are being met. This is part of a wider
agreement that also includes curbs on bonuses and requirements to disclose salaries, and has been negotiated as a
result of the banking sector bailout that occurred in the context of the crisis.
The banks are also committed to implementing the recommendations of the UK Business Finance Taskforce (which
also comprises Standard Chartered), in particular the following;
i) Support a network of mentors from the banks, attached to existing mentoring organizations, to deliver a free finance
service to small and medium sized businesses across the United Kingdom;
ii) Improve service levels to micro enterprises through a new lending code;
iii) Publish lending principles that clearly set out the minimum standards for medium-sized and larger businesses;
iv) Establish transparent appeals processes for when loan applications are declined, with processes independently
monitored by a senior independent reviewer, who will publish the results of their review;
v) Initiate a pre re-financing dialogue 12 months ahead of any term loan coming to an end;
vi) Establish and invest in a new £1.5 billion Business Growth Fund (built over a number of years);
vii) Support the Enterprise Finance Guarantee Scheme;
viii) Help mid-sized businesses access syndicated debt markets;
ix) Improve access to trade finance;
x) Signpost alternative sources of finance;
xi) Fund and publish a regular independent survey on business finance demand and lending supply;
xii) Enhance the cross-industry lending dataset by broadening the statistics on (among other things) lending to deprived
areas and national and regional data on the provision of bank support to business start-ups
xiii) Hold regional outreach events throughout 2011;
xiv) Improve customer information including a review of literature and other materials (e.g., loan applications); and
xv) Establish a Business Finance Round Table.
Source: http://www.hm-treasury.gov.uk/d/bank_agreement_090211.pdf
data availability and investing in regular collection and
dissemination of reliable financial inclusion data. The
focus of these data-related investments will vary by
country, but overall recommended measures to
improve the current data landscape on SME finance are
the following:
• Harmonize the definitions of the concepts to be
measured to ensure comparability across countries
and over time, to devise development strategies, and
to adapt or design informed policies. This is especially
important for data and measurement of access
to finance by SMEs and women-owned SMEs. 12
• Standardize data collection and indicator computation.
The use of international concepts, classifications
and methods promotes the transparency,
consistency and efficiency of statistical systems.
• Build or improve national statistical capacity to
improve data availability and quality.
• Improve data availability and quality with a focus on
missing indicators including barriers to access, usage
by enterprises, role of informal providers, etc.
• Build consistent and reliable data sources for access
to finance by agricultural SMEs. 13
• Ensure open data access.
12 Also see “Strengthening Access to Finance for Women-Owned SMEs in Developing Countries: Executive Summary for GPFI Report”
prepared by IFC for the GPFI SME Finance Sub-group, August 2011.
13 Source: “Policy Paper on Agricultural Finance for Small and Medium-Sized Enterprises: Executive Summary for GPFI Report” prepared
by IFC for the GPFI SME Finance Sub-group (August 2011).