Hopes that alternative credit providers would
gain greater access to small and medium-sized enterprises
(SMEs) as a result of the
UK small business bill have been dashed by recent
developments concerning its implementation.
But if any non-banks are going to make the most of the
changes, it is likely to be electronic payment services firms
such as Amazon, Google and Paypal.
The government’s Small Business, Enterprise and
Employment Bill, which passed its second reading on July 15,
intends to make it easier for SMEs to seek loans from lenders
other than their traditional banks. It presents new
opportunities for alternative credit providers, who are
included in the group of entities to which banks must refer
unsuccessful SME credit applicants.
But rather than private equity or hedge funds, whose direct
lending activities have already caught the attention of
regulators and borrowers, e-money firms – which are
active in one of...