Small and Medium-sized Enterprises: Interest Rates Debate
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Baroness Kramer
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Small and Medium-sized Enterprises: Interest Rates
Baroness Kramer Excerpts(8 months ago)
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The Earl of Minto (Con)
I am not aware that we have made any specific proposal with NatWest but, through the British Business Bank, with a base rate of 5.25%, SMEs can borrow at 6%. They will find it very hard to match that anywhere in the market.
Baroness Kramer (LD)
My Lords, community development financial institutions lent over £80 million last year to in excess of 3,000 small businesses, 90% of which had been turned down by a conventional lender. Will the Government finally grasp the nettle and incentivise the major commercial lenders to invest in CDFIs in order to provide lending to those small businesses that do not fit the portfolio of commercial banks, as they do in the United States?
The Earl of Minto (Con)
The noble Baroness makes a very good point. CDFIs have been extremely successful and, if one looks at the plethora of lending opportunities right now, it continues to broaden because of the new entrants into the market. We will certainly take it up with the major banks and see where we get.