Client Adivsory: UK Banks Grapple With SME Related Mis-Selling: An EFG Example
The U.K. government-backed Enterprise Finance Guarantee scheme was designed to encourage banks to provide funding to small and medium-sized firms. Under the initiative, the Government guaranteed the banks up to 75% of losses in the event of default. In large measure, the initiative succeeded enabling thousands of businesses with robust business proposals but lacking the security for conventional loans to receive much-needed capital. However, as one large UK Bank publicly acknowledged earlier this year, due to a mixture of misunderstanding and misexplanation of the product, instances of potential mis-selling had been identified in a proportion of EFG-related loans.
Read Clutch’s analysis and report here.