The Office of Fair Trading (OFT) has announced a review of competition in the SME banking market which may emphasise the importance of specialist finance to small businesses.
The OFT study, part of an ongoing programme of work in retail banking, will be seeking views on competition in the supply of lending. It will assess whether lack of competition is restricting access to financing for SMEs, whether there are types of SME which are having difficulties accessing funding, and competition among banking service providers and service value.
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Julian Rose, head of asset finance at the Finance and Leasing Association (FLA), said the research would "highlight the important role of specialist finance companies to the sector, both the specialist non-banks and the growing small banks."
Clive Maxwell, chief executive of the OFT, said: "A competitive banking system and access to finance is vital to businesses and to economic growth".
He added that the review would allow the Competition and Markets Authority to decide if it would make a market investigation reference by 2015, and welcomed the recent Parliamentary Commission on Banking Standards report which "stresses the importance of competition in this sector."
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