Lloyds Bank, said it will grow its lending to small-and-medium enterprises (SMEs) by a further 1 billion pounds this year, seeing stronger growth prospects for smaller businesses as Britain’s economic recovery takes hold.
Lloyds’s pledge comes after British politicians launched an inquiry last month into the lending practices of banks to small businesses last month. Britain’s competition watchdog is also considering a small business banking probe.
Banks such as Royal Bank of Scotland have been accused of sucking cash out of viable small businesses while other major banks have been criticized for not offering enough credit to SMEs.
Lloyds said the move would help underpin its track record in SME lending, which has increased against a decline across the wider banking industry.
“We are now seeing the recovery gathering pace and there are more reasons for small and medium-sized enterprises to be optimistic and to start investing for growth,” Lloyds’s managing director of SME and mid markets banking, Tim Hinton, said in a statement.
Apart from the growth in lending, it plans to double the amount of money local bank managers are able to lend without central approval to 1 million pounds, a policy aimed at ensuring lending decisions are made more quickly.
Lloyds also intends to increase lending through trade finance for overseas businesses by 25 percent during 2014.