MPs launch inquiry into SME lending
The Treasury Committee has launched a new inquiry into small business access to finance and small and medium-sized enterprise (SME) lending.
The MPs will investigate the accessibility of finance, the role of financial innovation in business lending, and the role of the Bank of England’s Term Funding Scheme, credit reference agencies and government state aid in encouraging small business lending.
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“Small businesses are the lifeblood of local communities, powering economic growth and fostering innovation and an entrepreneurial spirit,” said Harriett Baldwin MP, chair of the Treasury Committee.
“As a committee, we’ll be examining whether small businesses are able to access the finance they need to grow and develop, whether there is adequate regulation of the sector, and if government can take a more active role to support business growth.”
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The committee will also explore whether SMEs have sufficient access to a complaints procedure for disputes with banks or lenders, the effectiveness of the Business Banking Resolution Service, whether business lending should be regulated, and the performance of the Financial Ombudsman Service in handling complaints.
“SMEs have had a relentlessly difficult few years,” said Anna Roughley, head of insight at the Lending Standards Board (LSB).
“As the pandemic that barred many from trading petered out, business owners were walloped with rapid inflation and a subsequent rise in interest rates. These factors had the pincer effect of squeezing margins and reducing the spending power of would-be customers. The road to recovery for SMEs has proved to be long – and bumpy.
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“The LSB oversees the only set of standards for banks and lenders that are designed to ensure good outcomes for SME customers, even during the most challenging landscapes. Now, more than ever, the industry must ensure the focus is on ensuring no SME gets left behind.”
