(5 years, 7 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)
ENABLE guarantee is a scheme administered by the British Business Bank that encourages participating banks and other financial institutions to lend more to small and medium-sized enterprises by either addressing the high capital consumption associated with such lending for banks or by reducing the cost of funding for other financial institutions in order to increase the supply and diversity of finance to SMEs.
British Business Bank programmes are supporting more than £5.9 billion of finance to over 82,000 smaller businesses (as at September 2018). The Department has approved guarantee facilities totalling £1 billion within the ENABLE programme.
We are now extending the scheme to other financial institutions (as defined in the request for proposals available on the British Business Bank’s website), in order to further increase the diversity of supply of funding available to SMEs. This extension will not create a new contingent liability.
The aggregate amount of the guarantees issued by the Department under the scheme is expected to be circa £2 billion, with extension beyond this subject to further review. Within this £2 billion, the aggregate notional amount of the guarantees extended to other financial institutions is capped at £400 million. This enables the Department to manage its risk appetite and limit its credit risk exposure.
As a matter of record, I will be laying a departmental minute today.
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