SME Finance Contents

1Introduction

1.Small and medium-sized enterprises (SMEs) form a hugely important part of the UK economy, accounting for 99.9 per cent of all private sector businesses and 60 per cent of all private sector employment.1 The effective provision of finance to the UK’s SMEs is therefore crucial for boosting the country’s economic performance.

2.Yet the dark clouds of past misconduct still hang heavy over the SME finance market, undoubtedly weighing down on SMEs’ trust in the financial institutions that serve them. Restoring that trust will enable the UK’s SME sector to act as an even greater growth engine for our economy.

3.The events that contributed to the erosion of trust in lenders have been rigorously scrutinised by the Treasury Committee, both in this and previous Parliaments. This inquiry is, in part, a continuation of that scrutiny, and follows the Committee’s specific investigations into events at RBS’s Global Restructuring Group (GRG). Throughout this inquiry, and in line with its other work, the Committee has been clear that it would not be appropriate, or indeed possible, for it to investigate individual cases of misconduct. The Committee understands that a large number of business owners have suffered at the hands of financial services firms, but it does not possess the mandate or the resources to analyse every case individually. Although it is important to understand past events—some of which amount to misconduct by individuals and institutions—the Committee’s scope for constructive action lies in ensuring the right lessons are learned for the future, and this report contains a number of recommendations that seek to address the deficiencies in the SME finance market that have been laid bare in recent years.


1 Department for Business, Energy & Industrial Strategy, Business Population Estimates for the UK and Regions 2017 (30 November 2017), p 1. SMEs are defined as businesses with 0–249 employees.




Published: 26 October 2018