The Bank of England’s latest figures have revealed a £300m fall in lending to businesses in the first three months of the year, despite the Government’s cash injections into its Funding for Lending Scheme.
The scheme was launched last year in a bid to provide accessible loans to businesses. The figure is an improvement on the previous quarter’s results, when lending fell by £2.4bn. However, these latest stats show the scheme is not living up to expectations.
John Longworth, Director General of the British Chambers of Commerce (BCC), said “it is a concern that lending continues to contract despite the Funding for Lending Scheme having been in place for nearly a year. It is also worrying that usage of the scheme seems to have dropped significantly since the end of 2012.”
“The real test for Funding for Lending is whether it is able to get credit flowing to young and fast-growing businesses. Unfortunately many of these growth firms are still being left out in the cold when it comes to accessing finance, which prevents them from expanding, creating jobs and helping to drive a business-led recovery.”