Business unaware of Project Merlin

Date: 29th November 2011

The effectiveness of Project Merlin, the government's initiative to get the UK's largest banks lending to small firms, has been brought into question.

Under the terms of the project, Barclays, HSBC, Lloyds and the Royal Bank of Scotland pledged to lend £190 billion to business in 2011 including £76 billion to smaller firms.

Recently published figures from the Bank of England showed that between quarter two and quarter three of this year, lending to small firms fell from £20.5 billion to £18.8 billion.

Now the publication of the latest Travelex Confidence Index has poured further doubt on the effectiveness of the scheme.

According to the study, 62 per cent of UK businesses are unaware of Project Merlin.

The index showed that 59 per cent of smaller enterprises have "little to no" confidence in the current economic climate - a drop of 32 per cent compared to June this year.

Paddy Earnshaw, customer director of Travelex Global Business Payments, said: "Access to credit is certainly important and it is worrying that nearly two-thirds of smaller enterprises don't know what Project Merlin is."

Posted by Thomas Fletcher