Four additional participants joined the scheme during this period. Barclays and Nationwide were tied at £6bn drawn down each - although Nationwide lent more during Q4, at almost £2bn to Barclay's £1.4bn.
Credit conditions for SMEs have also improved, but to a lesser extent than for households, so the Bank has announced that FLS will continue to support lending to businesses in 2014. The Bank and HM Treasury announced on 28 November 2013 changes to the terms of the FLS Extension to refocus the incentives in the Scheme towards business lending in 2014, with 34 participants signed up to this extended FLS.
Commenting on today’s data, Paul Fisher, Executive Director for Markets at the Bank of England, said:
“The UK recovery has gained momentum, with easier credit conditions playing an important role. Since the FLS was launched in mid-2012, FLS participants’ net lending to households and businesses has been around £10bn. In 2014 the FLS will continue to support lending to businesses, where it is most needed.
The firm-by-firm sectoral lending data - published for the first time today - show that a number of participants, including some smaller, challenger banks, have successfully used the FLS to expand their SME lending.”
Louise Beaumont, co-founder of Platform Black, commented:
“Lending to the UK’s SMEs fell by a further £261m in January, which now means that over the last 24 months there have only been 4 months that have shown any reverse in this monthly trend. Seeing these monthly statistics come out every month is rather like listening to a broken record play out a thoroughly depressing riff with no sign of any relief from the cycle of misery. We read about large blue chip institutional investors now taking up the mantle to lend to larger SMEs but it is at the smaller end of the spectrum that the damage is so widespread.”
Matthew Fell, CBI Director for Competitive Markets, said:
“Although overall net lending remains positive, lending to businesses is still subdued so it’s right the Funding for Lending Scheme is now focussed squarely on business lending. The increase in confidence among small and medium-sized businesses should soon translate into greater demand for finance and it’s important this is met by the FLS.
“To ensure that business’ appetite for investment is supported, we’re calling on the Chancellor to use his upcoming Budget to continue the Annual Investment Allowance at its current higher rate.”
