Business leaders in the West Midlands have urged banks to be more pro-active in promoting Project Merlin after figures were released showing they were on course to miss lending targets.
HSBC, Barclays, Royal Bank of Scotland and Lloyds Banking Group all signed up to the Project Merlin deal, which set out to promise lending lending, clarity on bonuses and greater transparency.
The banks agreed with the government in February to increase lending to SMEs to £76 billion, which equates to £19 billion in the first quarter – but the figures had fallen £2.2 billion short.
Christine Braddock, president of Birmingham Chamber of Commerce and Industry, said: “The figures are disappointing because Project Merlin was designed to stimulate credit-worthy small businesses.
“While today’s figures do not indicate an improvement in credit conditions for small businesses, the banks should do more to take the message to customers.
"The banks are believed to be trying to stimulate demand for new borrowing but these figures indicate they need to do more.”
Business leaders in Coventry and Warwickshire say the Project Merlin figures have come as no surprise.
Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, said it backed up what the Chamber was hearing from members.
She said: “We met David Frost – the director general of the British Chambers of Commerce – down at Parliament last week and he said that banks are saying the money is there to lend and businesses are saying they cannot access it.
“What we really need to see is old-fashioned relationships developing again between the banks and their business customers and we are seeing evidence of those relationships on our patch.
“But there is no denying that one of the single biggest issues raised at Chamber events is still access to funding.
“Locally, the Coventry and Warwickshire Local Enterprise Partnership (LEP) is working with banks to try to resolve this issue for companies in the city and the county.
“We have started a very strong dialogue and an access to finance group has been established to look at this very issue.
“My message to businesses is to keep raising this with the Chamber and the LEP we will do all we can to help resolve these issues when they arise.”