Banks still missing Merlin targets, despite lending increase
Second quarter figures prompt mixed reaction from business groups
Britain’s banks are still missing their Project Merlin targets – despite a marked increase in lending to small businesses during the second quarter of 2011.
New figures from the Bank of England show that Britain’s major lenders made £20.5bn available to small and medium-sized firms during the second quarter – up from £16.8bn in the first.
However, the overall amount lent to smaller companies during the first six months – £37.3bn – falls almost £1bn below the half-yearly targets laid down in the Merlin agreement, which was signed by the banks in February.
Reaction to the figures has been mixed. The Forum of Private Business said it was “pleased” with the second-quarter increase; senior policy adviser Alex Jackman expressed the hope that “the publicity around the lending figures… will encourage more businesses to go back to their lending providers and get the cash they need.”
However some remain deeply critical of the Merlin agreement. Shadow treasury minister Chris Leslie, one of the loudest critics, said there were still “significant flaws” in the agreement, and pointed to “questions about how the data is collated and reported”.
Leslie added: “We need tough action from the Tory-led government to help our small businesses – but George Osborne continues to let the banks off the hook.”