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Open letter calls on Grant Shapps to spice up SME credit score entry by means of improved information sharing


Codat – the common API for small enterprise information – and a bunch of lenders have written an open letter to Secretary of State for Business, Energy and Industrial Strategy, Grant Shapps, calling for the federal government to help improved information sharing initiatives to sort out the difficulties confronted by SMEs in accessing credit score.

The letter has been co-signed by Atom Bank, Funding Circle, iwoca, Allica Bank, SPRK Capital, Recognise Bank, Plaid, Playter, OakNorth, Wiserfunding and TrueLayer. It has additionally obtained help from the Federation of Small Businesses (FSB).

Difficulty accessing funding is without doubt one of the largest limitations to SME development. The downside exists as a result of the SME lending panorama is just not arrange for companies or lenders to succeed. It’s too troublesome for lenders to entry correct, updated information to make knowledgeable choices and mortgage purposes are too complicated and time-consuming for SMEs.

Stimulating development within the SME sector – which contributes 50 p.c of GDP and 60 p.c of employment within the UK – is vital to ending the continued recession. Improved information sharing between the monetary instruments utilized by SMEs and lenders is vital to fixing the issue, as set out within the ‘Closing the small business funding gap’  analysis report.

The know-how required to enhance information stream and accessibility between the monetary instruments utilized by SMEs and lenders already exists. Legislative help from the federal government to progress on Open Banking, help lenders and small companies is lengthy overdue.

The letter calls on the federal government to go the Data Protection and Digital Information Bill, guaranteeing that the laws applies to information wanted for SME underwriting. And, to maneuver swiftly to seek the advice of with the trade on how know-how could be applied to enhance SME entry to credit score.

Pete Lord, Codat CEO, says “We within the trade are able to drive the implementation of this progressive know-how and legislative help from the federal government can play an essential position in guaranteeing its success.”

Martin McTague, National Chair of the FSB, says: “Small companies’ entry to finance is crucial for development, funding, and innovation, and we’re involved that our analysis signifies that small companies’ urge for food for exterior finance is decreasing. At the identical time, the variety of these accepted for finance is falling, whereas the rates of interest provided to those that do succeed are rising quick.

“We’re going to want to discover new concepts to vary this round, such because the lending passport, which has the potential to assist small companies of their seek for funding by simplifying the applying course of, saving them time and duplicated effort. Anything which promotes competitors and a better vary of choices within the finance market is very important, and particularly welcome, proper now.”

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