Newer banks are being excluded from government initiatives to increase the financing of small businesses, OakNorth has claimed.
Liam Fox, the secretary of state for the Department for International Trade, has announced that UK Export Finance (UKEF) will partner with five of the UK's biggest banks to deliver government-backed financial support to exporters.
The partnership is expected to offer businesses access to millions of pounds in government export support and will feature Barclays, HSBC, Lloyds Banking Group, RBS/NatWest and Santander.
“Since Brexit, large banks have been retrenching from the SME lending market, so the fact that the government is taking steps to rectify this and encourage large banks to continue lending despite ongoing uncertainty is a step in the right direction,” said Rishi Khosla, CEO and co-founder of OakNorth Bank.
However, Rishi was very disappointing that smaller, newer banks like OakNorth had once again been excluded from the process despite what it had already done for SME financing in the UK.
“This is reminiscent of what happened with the British Business Bank's Help to Grow Programme – another government guarantee scheme.
“A large bank was the first to be enrolled, but didn't close a single deal under it for over 10 months.
“We became the second bank to join it in January this year and have already closed several deals under the programme.
“If the government is serious about making this initiative work, it should be working with new banks like us, which are in a much stronger position to actually make a difference to British SMEs.”
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