Cover withdrawal scares banks from lending to SMEs
Barclays and Royal Bank of Scotland yesterday told the Department for Business Select Committee that problems with trade credit insurance were stopping banks lending, The Times reports
The banks claimed the threatened withdrawal of credit cover would stop banks’ customers from being able to repay bank loans.
Steve Cooper, the managing director of Barclays' local business division, said that the problems with credit insurance could become serious “although it is not at the moment”, The Times reports
Michael Izza, the chief executive of the Institute of Chartered Accountants, told MPs: “We are hearing from members that there is a risk that credit insurance could be withdrawn for entire sectors. The withdrawal of credit insurance would totally change the relationship between SMEs and their customers.”
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