U.K. Business Secretary Vince Cable said 13,000 companies had applied for loans worth 2 billion pounds ($3.1 billion) in total under the government’s credit-easing program in the face of banks’ reluctance to lend.
“The banks are risk-averse,” Cable told Parliament’s Business Committee in London today. “It’s a constant source of frustration.”
The National Loan Guarantee Scheme began in March with the aim of making 20 billion pounds of discounted loans available to small companies to help ease credit strains and spur economic growth.
Under the program, banks including Barclays Plc, Royal Bank of Scotland Group Plc, Lloyds Banking Group Plc and Banco Santander SA use government guarantees to borrow cheaply and then pass on the benefit to companies.
In June, the government announced it will extend the program so that companies with annual sales of up to 250 million pounds, about 99.9 percent of all companies, can benefit. Previously, only those with sales below 50 million were eligible.