Faculty of Education, Social Sciences and Law

School of Law

Solving financial inequality for smaller businesses in the UK

25 February 2016 | 13:30-14:30 | Seminar
2.46, Liberty Building

This seminar is part of the CBLP PGR seminar series, where postgraduate students present their work and answer questions about it. This is a free event but registration is required in advance. A light lunch will be provided.

In the UK, small and medium-sized enterprises (SMEs) play a vital and indispensable role in the national economy, as they account for 99.9% of all businesses, hiring 60% of total employees in the country, and producing nearly half of UK’s Gross Domestic Product (GDP). However, in contrast, British SMEs only obtained 38% of total bank credits from financial institutions, while 62% of bank loans are granted to large corporations. This great inequality, between smaller businesses and large companies, in obtaining bank loans resulted in the financial difficulty of SMEs in the post-crisis era. It also created a precious opportunity for the growth of alternative financing mechanisms outside traditional banks and security markets, which could be a potential solution to the financing puzzle of SMEs. This presentation will mainly talk about a new breed of challenger banks in the UK which focus on the SME financing, as well as the rapid development of peer-to-peer lending (P2P) industry.

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