FLS fails to boost loans

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According to the latest data released by the Bank of England (BoE), net lending under the Funding for Lending scheme (FLS) to both SME’s and large companies declined during Q22014.

During Q22014, net lending to SMEs stayed negative at -£0.4bn (-€0.5bn), while net lending to large companies was at -£3.5bn (-€4.4bn). Net lending to all business, including eligible non-bank credit providers was positive at £3.9bn (€4.9bn).

The FLS had been launched by the BoE and the treasury in 2012 in a bid to encourage bank lending to businesses and kick start economic growth. The scheme allows banks and building societies to tap into a pool of £80bn, and allows participants to draw £5bn in the scheme for every £1 of net lending to SMEs.

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