Incumbent banks block alternative lenders’ access to Bank of England’s ‘Term Funding Scheme’

In the United Kingdom, Her Majesty’s Treasury will not provide accredited non-bank lenders access to the Bank of England’s capital at wholesale prices through incumbent banks. Charlotte Crosswell, CEO of Innovate Finance, has urged policy makers to recognize the role fintechs play in efficiently providing capital to small businesses. The government-sponsored Bounce Back Loan Scheme (BBLS) has a fixed interest rate of 2.5 per cent, but some alternative lenders have struggled to amass enough capital to lend out to SMEs. While not a perfect comparison, this move stands in contrast to the manner in which the Fed and Treasury have accepted the assistance of fintechs in distributing PPP loans in the US. AltFi

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