CONCERNS RAISED OVER SMALL BUSINESS BANKING

CONCERNS RAISED OVER SMALL BUSINESS BANKING

LLOYDS AND RBS CONTROL 70% OF SMALL BUSINESS LOANS

SNP MSP Christopher Harvie has raised concerns over to access finance for
small businesses as reports suggest executives at both RBS and Lloyds are
privately admitting that they are unlikely to meet their commitment to an
additional £39bn of lending. The banks had signed up to this when the UK
Government stepped in to insure their toxic assets in March.

Member of the Scottish Parliament’s Economy Committee Professor
Harvie said:

"These reports raise serious concerns over the state of the banking
industry for small businesses.

"Lloyds and RBS have over two thirds of the market between them. That is
not good for competition and not good for Scotland’s small businesses.

"Last month, a report by the Scottish Government’s Chief Economist Dr
Andrew Goudie made clear that the slightest policy change from either of
these banks would impact on Scottish small businesses.

"While the Scottish Government has taken steps toward the establishment of
a Scottish Investment Bank which may offer a new route to finance for
small businesses, the UK Government has not used its shareholding in RBS
and Lloyds to effectively encourage these banks to back small businesses
and many have seen their overdrafts cut, loans rejected and charges
increased despite running successful and profitable businesses.

"Banks need to be careful with the money they lend but it is absolutely
unacceptable to allow the small businesses which drive our local economies
to suffer because of bad banking practices."