John Anderson: Fair lending to help our businesses

Britain's bigest banks are to publish lending data across 10,000 UK postcodes by the end of the year, as part of efforts to boost credit to small businesses

The report will be the most detailed regional breakdown yet of lending in the UK, as seven of the major banks have agreed to provide data showing a lender-by-lender account of borrowing across the country. The Government hopes that by highlighting areas where larger banks are often not willing to lend, the data will allow local and regional lenders such as Community Development Finance Institutions to move into these areas and offer finance.

We at the North East Business and Innovation Centre know the importance of investing in SME development and are committed to helping build business success by offering such initiatives as the Innovation Programme. Highlighting the need to continually invest in innovation, it offers North East businesses expert advice, guidance and essential access to financial support, which could ultimately result in a growth in profits.

We are keen that even more businesses unlock their innovation potential through the scheme, to develop new products and ways of working that will help give them the competitive edge, and a review of borrowing could help many businesses access affordable credit they need to be able to sustain and grow.

In the North East, Government lending channelled through banks has not been reaching businesses. It appears that they are only lending to those at the safer end of the spectrum. We hope the report identifies this and highlights the need to enable alternative providers to access available funds and become responsible lenders.

The Funding for Lending Scheme (FLS), launched in July 2012, designed to incentivise banks and building societies to boost their lending to the UK economy, does not appear to have encouraged many of the big lenders to fund local SMEs and many have been left with an abundance of cash due to their risk-averse approach.

Without access to fair credit, many local businesses would not able to even start, let alone survive or grow; jobs would not be created in the region or saved. The North East BIC will continue to help businesses through the Innovation Programme and other schemes. However, I hope that the review is a step in the right direction towards more transparency and access to affordable credit to all markets.

:: John Anderson CBE is chairman of North East Business and Innovation Centre (BIC) Ltd

 
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