Written evidence submitted by eBay
In November, eBay submitted a dossier of evidence
to the Independent Banking Commission exposing the difficulties
that Britain's small businesses are experiencing in securing access
to finance. I am writing to ask you to take this evidence into
consideration during the Treasury Select Committee's inquiry into
competition and choice in the banking sector.
In a special report of eBay's Online Business Index,
our regular barometer of the attitudes and performance of online
firms, we investigated the relationship between SMEs and high
street banks, naming and shaming the banks which were holding
back finance. The report found that:
— A third
(33%) of small businesses say they are unable to access new finance.
— A third
(33%) say they are forced to rely on expensive overdraft facilities
in order to borrow.
— Three
fifths (60%) believe that banks are to blame for the difficulties
experienced by SMEs in accessing finance.
— Half
(48%) believe that greater competition in the banking sector is
more important than maximising returns from the sale of public
shareholdings in the banks.
Our report shows that access to finance remains an
acute problem for a significant number of SMEs. Many SMEs believe
that inadequate competition and choice in banking is making the
problem worse.
In light of this evidence, we urge the committee
to consider remedies which would address this problem—for
example, by making the promotion of greater competition in the
banking sector the Government's primary objective when drawing
up proposals for the sale of public shareholdings in Britain's
leading banks. We also urge the committee to examine ways of encouraging
new entrants to the banking market in order to provide small businesses
with a greater choice of banking services.
A copy of eBay's evidence to the Independent Banking
Commission is attached [not printed]. I hope you will give this
full consideration.
Clare Gilmartin
eBay's Vice President for European Marketplaces
January 2011
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