Banks launch mentoring scheme for SMEs

News Article - 04 July 2011
Category: Business

The UK's five major banks are providing small and medium-sized enterprises (SMEs) with a mentoring scheme aimed at offering greater support for day-to-day issues regarding finance, marketing, HR and more.

Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland and Santander have each been criticised for not lending enough to fledgling business start-ups and this scheme will go some way to smoothing relations with entrepreneurs and SMEs alike.

The Project Merlin deal between the Government and the banks saw the latter agree to lend £76 billion to SMEs throughout 2011 - equating to £19 billion a quarter.

Yet Bank of England figures show that the top five UK banks loaned just £16.8 billion between them in Q1 2011.

Stephen Pegg, director at Lloyds Banking Group, said this latest mentor scheme would give SMEs access to further finance.

"Having a bit of financial input, someone to ask the right questions … helps you put together better lending propositions so actually that finance can get out there and businesses can be encouraged to have the confidence to invest and the contacts to look at a wider range of finance," he said.

Andrew Cave, of the Federation of Small Businesses, is encouraged to see the banks taking positive steps to unite the small business community.

"[This initiative] starts to repair the mistakes of the past by bringing people who are working in the banks closer to the business community," he said.

The launch of this mentoring scheme is just days after Shadow Minister for Small Business and Enterprise, Chuka Umunna urged Lloyds chief executive Antonio Horta-Osorio to improve its lending services to SMEs.

The Government continues to expect SMEs within the private sector to grow the economy, therefore it is important that they are given the wherewithal to grow and create jobs. With almost half private sector turnover provided by SMEs it is crucial that banks don't marginalise start-ups and instead guide them through day-to-day issues.

Article keywords: SME, bank mentoring scheme, bank lending, Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland, Santander, Project Merlin, Bank of England, Stephen Pegg, Andrew Cave Federation of Small Businesses, Small Business and Enterprise, Chuka Umunna, Antonio Horta-Osorio

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