Bank lending shows lack of progress

Kreeger said: “Half a decade of banks plodding along in first gear is not progress. Growth in UK businesses will have suffered as a result of the withdrawal of more than £3 billion pounds in support – at exactly the time when they need to invest in the future.

“It’s very difficult for SMEs to expand without investment, no matter how successful they are. In the wider economy, these smallest firms form the advance guard – the nimblest and most entrepreneurial - that should normally be able to turn on a sixpence when new businesses comes in.

“SMEs are the scouts for a proper economic recovery. But mainstream banks are standing in their way.

“That’s why alternative finance is growing at such an astounding pace – to supply their non-financial counterparts. Peer-to-peer lending will soon be worth billions on its own, while short-term secured loans are already worth nearly £2 billion a year.

“The news from the BBA is just another announcement heralding the decline of old-style banks. New finance is progressively confining the age-old ‘banker says no’ story to history.”