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‘Undisruption’ in the SME Funding Market: Information Sharing, Finance Platforms and the UK Bank Referral Scheme

Authors
  • Schammo, Pierre1
  • 1 School of Law, Durham University, Durham, UK , Durham (United Kingdom)
Type
Published Article
Journal
European Business Organization Law Review
Publisher
Springer International Publishing
Publication Date
Feb 22, 2019
Volume
20
Issue
1
Pages
29–53
Identifiers
DOI: 10.1007/s40804-019-00139-x
Source
Springer Nature
Keywords
License
Green

Abstract

Since the financial crisis, various policy initiatives have been adopted in the UK with a view to improve access to finance for SME businesses. One of these initiatives is the bank referral scheme. Under this scheme, incumbent banks must pass on information about SMEs (with an SME’s consent) that were unsuccessful in securing bank funding, to so-called finance platforms whose role is to match SMEs with alternative lenders. The scheme received attention in the UK and elsewhere as an innovative way to combine information sharing and technology in order to help SMEs gain access to external finance. It was launched in 2016. Since then, it has been closely monitored by the UK Treasury. The aim of this article is to reflect on the bank referral scheme and its raison d’être, especially by focussing on the regulations which implement the scheme, and on potential ways to improve the referral process.

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