We've made a pledge in response to the lack of credit facilities for small businesses offered by the UK's banks, which has been felt deeply in the North.
UK Finance data shows that the vale of lending (both loans and overdrafts) for small and medium enterprises (SMEs) in the North has shrunk by 14.3%, compared with the national average of 9.5%, over the last three years. The North West is the worst affected region, suffering a contraction of 15.3% in three years.
In Manchester, the shrink has been even more dramatic, declining 22.8% over the three years, which is twice the contraction experienced by London at 11.4%. Business confidence in the North West now stands at -17%, when in London it's +13%, according to the FSB's Voice of Small Business Index.
In contrast, iwoca's support for the North's small businesses has meant our lending has grown 89% per year over the last three years. In Manchester, it has grown 65% per year over the same three years. Out of the £100 million pledge we've made, £15 million is for Manchester alone.
Our CEO Christoph said, "Micro busiensses are the powerhouse of the UK's economy. Even though they employ less than 10 people, they account for 96% of the UK's 5.5 million businesses, 1-in-3 private sector jobs and 20% of all economic output. While these businesses have been feeling the pinch, large corportations have enjoyed record high levels of access to capital. Because of the continued lack of action by banks to increase access to finance for these small businesses, iwoca is pledging to lend £100 million in the North by 2020."
Christoph continued: "The banks claim that small businesses simply aren't interested in credit products. Really, the banks discourage these businesses from taking fiance through lengthy and frustrating application forms, and rigid and unfair lending criteria. At iwoca, we understand the needs of small businesses, and we've build technology to make faster and fairer lending decisions, breaking the barriers small businesses face to accessing finance."
You might also enjoy reading up on some more iwoca stories: