February 3, 2023

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Open letter calls on Grant Shapps to boost SME credit access through improved data sharing

2 min read

Codat – the universal API for small business data – and a group of lenders have written an open letter to Secretary of State for Business, Energy and Industrial Strategy, Grant Shapps, calling for the government to support improved data sharing initiatives to tackle the difficulties faced by SMEs in accessing credit.

The letter has been co-signed by Atom Bank, Funding Circle, iwoca, Allica Bank, SPRK Capital, Recognise Bank, Plaid, Playter, OakNorth, Wiserfunding and TrueLayer. It has also received support from the Federation of Small Businesses (FSB).

Difficulty accessing funding is one of the biggest barriers to SME growth. The problem exists because the SME lending landscape is not set up for businesses or lenders to succeed. It’s too difficult for lenders to access accurate, up to date data to make informed decisions and loan applications are too complex and time-consuming for SMEs.

Stimulating growth in the SME sector – which contributes 50 percent of GDP and 60 percent of employment in the UK – is key to ending the ongoing recession. Improved data sharing between the financial tools used by SMEs and lenders is key to solving the problem, as set out in the ‘Closing the small business funding gap’  research report.

The technology required to improve data flow and accessibility between the financial tools used by SMEs and lenders already exists. Legislative support from the government to progress on Open Banking, support lenders and small businesses is long overdue.

The letter calls on the government to pass the Data Protection and Digital Information Bill, ensuring that the legislation applies to data needed for SME underwriting. And, to move swiftly to consult with the industry on how technology can be implemented to improve SME access to credit.

Pete Lord, Codat CEO, says “We in the industry are ready to drive the implementation of this progressive technology and legislative support from the government can play an important role in ensuring its…

Business Matters

2023-01-25 08:47:01

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