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'Underlying problems' remain in business banking sector

Date Added: 09/08/2011  

New figures relating to Project Merlin do not change the fact that companies are still struggling to access sufficient help from banks in the wake of the recession.

That is the view of John Walker, national chairman of the Federation of Small Businesses (FSB), who has insisted the financial sector is still not doing enough to stimulate economic growth among firms in the aftermath of the slump.

Statistics published last week (August 5th) with regard to Project Merlin - a deal struck between the government and the country's five biggest banks to improve lending conditions for smaller companies - show a total of £37.4 billion was loaned throughout the second quarter of 2011.

This represents a shortfall on the average needed throughout the year to achieve the annual objective of £190 billion, but the government insisted they are a "big improvement".

However, Mr Walker noted this does nothing to resolve the "underlying problems" in the banking arena.

"It should not be about meeting targets but about genuinely helping businesses start-up, grow and invest," he added.

Posted by Miles Pritchard

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