FSB: Use Rock to end the banks’ credit monopoly
THE government should consider using Northern Rock as a “people’s bank”, operating via the post office network, to increase the flow of credit to small firms, the Federation of Small Businesses (FSB) said yesterday.
The FSB said that the state support offered to banks had allowed them to develop a “monopoly” on providing businesses with financing, damaging competition.
The organisation said that credit should instead be made available through other channels, such as Post Offices, local councils or Regional Development Agencies.
FSB chairman John Wright said: “Despite government bailouts and interest rates set at a record low, small firms are still finding it tough to access affordable loans and overdrafts from banks.”
He said that one solution would be to use Northern Rock as a lending conduit to small firms, through Post Office branches.