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Funding for Lending “stronger” in second quarter 2 September 2013

The Bank of England has revealed that net lending through its Funding for Lending Scheme (FLS) was £1.6 billion in the second quarter, “slightly stronger” than in previous quarters.

The latest figures showed that in the quarter ending 30 June 2013, 18 banks and building societies made FLS drawdowns of £2 billion, although the BoE acknowledged that lending since the scheme began remains “broadly flat”.

Net lending since the scheme began in June 2012 is down £2.1 billion, although the total amount drawn down from the scheme by participating banks is £17.6 billion.

Paul Fisher, executive director for markets at the BoE, said: “The FLS is continuing to support lending to the UK economy with a range of indicators suggesting that credit conditions are steadily improving for households and firms, and FLS participants collectively expect net lending volumes to pick up over the remainder of this year.”

The FLS aims to encourage more lending to UK businesses by reducing bank funding costs.

During the second quarter, Nationwide Building Society, Lloyds Banking Group, Virgin Money and Barclays were the biggest net lenders.

But according to the Federation of Small Businesses (FSB), 61% of 2,330 firms surveyed have not heard of the scheme.

John Allan, national chairman of the FSB, said: “We hope the small increase in lending from Funding for Lending continues to build. However, with many firms unaware of what FLS is we want to see an increase in communication that the banks are open for business.

“Only when the banks tailor their packages specifically to certain sectors and improve the way they advertise those products to small businesses, will small firms get the finance they need.”

 

 

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