06 Nov 2024
The Treasury's bank referral scheme secured loans for just one in 20 companies, a review has revealed.
Designed to help increase access to finance for small businesses, the bank referral scheme obligates nine major banks to refer small businesses they decline for loans to independent services that help connect them with other sources of finance.
The scheme was originally launched in November 2016 and has helped push through around 5,400 business deals. These deals were worth around £128 million and the average loan amounted to £24,000.
Critics of the scheme have said that it has 'limited impact' and that its success rate is 'shockingly low'.
Commenting on the matter, the Treasury stated that the bank referral scheme has 'generally met its objectives' and helped to raise awareness of alternative finance options for small firms.