Coalition's Planned Approach to Addressing Small Business Loans Revealed in CFIT Analysis
The Centre for Finance, Innovation and Technology (CFIT) has announced a new coalition aimed at addressing the UK's Small and Medium Enterprises (SME) credit gap. The initiative, backed by major partners such as Mastercard, Lloyds Banking Group, and HSBC, aims to utilise technology-driven solutions and enhanced data sharing to improve credit decision-making processes for SMEs.
The coalition's strategy centres around leveraging advanced technology and data-sharing frameworks to provide lenders with a more comprehensive understanding of SMEs. This approach aims to deliver fairer and more accurate credit assessments, moving beyond traditional financial metrics.
One of the key focuses is on supporting SMEs that prefer sustainable growth without immediate debt accumulation. The coalition recognises that 70% of UK SMEs favour slow growth over increased borrowing.
Industry leaders, including Mastercard, Lloyds Banking Group, and HSBC, have joined forces to develop scalable, tech-enabled credit solutions tailored to SME needs. The coalition also encourages partnerships across the financial ecosystem to spur innovation in SME financing.
By combining collaborative partnerships, cutting-edge technology, and smarter data usage, the coalition aims to bridge the SME credit gap. This, in turn, supports the growth of SMEs and the broader UK economy.
The coalition is committed to helping businesses overcome their fear of finance and apply for funding with confidence. It also intends to improve smaller businesses' understanding of their financial data and eligibility for credit.
In addition, the coalition will publish constructive policy recommendations for the government. They will also use the additional data to assess whether rejected applications could have been approved under different circumstances.
To further diversify its revenue sources, CFIT has announced a shift to a "hybrid model", running publicly and privately-funded coalitions simultaneously.
The ultimate goal is to provide SMEs and lenders with better insights into their financial health, making it easier and more efficient for SMEs to obtain credit. The coalition will focus on the five million businesses in the UK with between three to 50 employees, particularly those in economically challenged regions.
Elyn Corfield, chief executive officer of business and commercial banking at Lloyds Banking Group, emphasises the critical role SMEs play in driving economic growth. Leon Ifayemi, the director of coalitions and research at CFIT, leads the coalition's efforts.
Angelene Woodland, chief customer officer at the British Business Bank, is supportive of the new coalition. CFIT continues to diversify its revenue sources throughout 2025 and beyond.
[1] Source: CFIT press release, 2022 [2] Source: Small Business Britain, 2021 [3] Source: UK Government, 2022 [4] Source: Innovate Finance, 2021 [5] Source: CFIT press release, 2022
- The coalition, backed by partners like Mastercard, Lloyds Banking Group, and HSBC, plans to utilize technology and enhanced data sharing to provide lenders with a comprehensive understanding of SMEs, aiming for fairer and more accurate credit assessments.
- Recognizing that 70% of UK SMEs prefer slow growth over increased borrowing, the coalition seeks to support those SMEs seeking sustainable growth without immediate debt accumulation.
- With the aim of bridging the SME credit gap, the coalition encourages partnerships across the financial ecosystem to spur innovation in SME financing and improve smaller businesses' understanding of their financial data and eligibility for credit.
- In an effort to address the UK's SME credit gap, the coalition will publish constructive policy recommendations for the government, utilizing additional data to assess whether rejected applications could have been approved under different circumstances.
