The Bank of England’s Funding for Lending Scheme is failing to encourage British banks to boost lending to small businesses.
Lending to small businesses by banks taking part in the scheme fell by £800 million in the fourth quarter, BOE said on Thursday.
However, lending to small firms reduced at a slower rate in 2014 as a whole than it did in 2013.
The FLS was amended to focus on small business lending in 2014, but has provided cheap money to banks on the condition that they lend to British businesses and households since mid-2012. The scheme was extended to run for a further year in December, and participants will be able to draw down funds until January 29th 2016, Reuters reported.