Banks' policies preventing growth, FMB says
Banks are preventing smaller builders from pursuing their growth plans, according to a recent statement by the Federation of Master Builders (FMB).As many as one in five SMEs has been forced to abandon their plans due to problems securing investment from banks. Brian Berry, FMB chief executive, said: "In our latest FMB's industry survey, 19 per cent of our members reported that bank lending policies had led to them putting aside growth plans. The danger is that the continuing refusal of the main high street banks to lend to viable building companies will hold back future growth for years to come."Mr Berry went on to say the FMB has made it clear to policymakers that growth will be restricted unless banks' policies change. Improvements to the housing stock cannot be accomplished without access to these funds, he claimed.He said any proposals aimed at remedying the situation would be welcomed by the industry and cited Ed Miliband's recent One Nation Economy speech as placing the spotlight on banks and their lending practices.In the speech, Mr Miliband said a Labour government would create an extra two banks in order to make lending more competitive and encourage lending to small businesses. Measures would also be introduced to prevent banks from getting too large and dominating the market.A commons select committee report published today (January 21st) says government schemes aimed to improve SMEs' access to funds have not achieved the aims set out for them. The government has had trouble accounting for the needs of different types of SMEs, it says.In addition, not enough has been done to make small businesses aware of the funding options available to them. More should be done to promote such awareness and to better inform banks about the particular needs of their SME customers.The establishment of the British Business Bank, which begins operating this year, would represent an ideal opportunity to set out a coherent programme, the Public Accounts Committee said.
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