The study also points out that the banks showed apathy towards meeting the gross lending target to small firms, which was GBP76bn, as the five banks managed to hand out GBP74.9bn.
The government’s effort to encourage banks to boost credit to cash-strapped businesses jeopardized by the banks in reducing the lending nearly GBP10bn last year.
A survey by financial specialist Bibby Financial Services observes that the firms’ managements are investing from their personal savings to keep their businesses on track, which is just an example of irresponsible behavior of banks toward SMEs.
Another study conducted by the Federation of Small Businesses in the UK reveals that a third of more than 11,000 members of the federation had used their own savings to fund their businesses.
The federal bank of UK said that the country’s five largest banks, which include Royal Bank of Scotland, Lloyds Banking Group, HSBC, Barclays and Santander, have shown less interest towards firms last year.
The study suggests that only one in 10 firms secured a bank loan in 2011, while one in three used their overdraft facility.
Nearly 30% members of Federation of Small Businesses in the UK said that they lost a growth opportunity as they weren’t able to access finance at the right times.
