The government of UK is considering rule changes in the country's lending industry. The proposed new rules would provide easier way for alternative finance providers and new banks to fund small and medium-sized businesses (SMBs), according to Bloomberg.
In an emailed statement made today, the Treasury said the proposed regulations would help new players in the funding market check the credit rating of smaller firms. Interested entities have been asked to submit their views within a consultation period that ends in February 17. The government is looking to submit legislation in the next Parliament session, the report detailed.
Prime Minister David Cameron, together with the Bank of England, has sought to encourage lending to SMBs after the financial crisis caused a shortfall of credit. According to the Treasury, banks will be required to report their credit data on SMBs should the new rules be implemented. The said data would be shared through credit reference companies, the report explained.
Earlier this month, Business Secretary Vince Cable and Deputy Prime Minister Nick Clegg announced that the UK government will provide further £250 million ($410 million) through its business bank. The purpose of the said amount is to spur lending to SMBs. The business bank will be fully operational in the fall of 2014, Bloomberg reported.
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