The British Business Bank faces mounting pressure for reform as MPs and industry leaders criticise its central role in the Chancellor’s rescue schemes.
The leader of one fintech group demanded a review into the Government-owned development bank and MPs urged the institution, known as the BBB, to improve its links to commercial banking and the tech industry.
Kevin Hollinrake MP, the Conservative chairman of the all-party parliamentary group on fair business banking, said the crisis had exposed “shortcomings” at the BBB. He said: “I don’t think we need to abolish [the BBB] but there needs to be a better working relationship between the entire sector – bringing fintechs into the BBB, better integration, a better match between the BBB’s systems and other banks.
“We could have brought in new lenders to break the stranglehold the big banks have over SME finance.”
The BBB has been criticised by bank and fintech insiders for its role as the administrator of the stumbling Coronavirus Business Interruption Loan Scheme (CBILS) and the start-ups rescue plan.
Christian Faes, chairman of the Digital Finance Forum and co-founder of LendInvest, said a review of the BBB’s role after the coronavirus would be “a very sensible idea”. “Before this crisis there was a pretty large school of thought wondering what the purpose of the BBB was and some of that thought was when a crisis comes it can step in and play a key role in helping,” he said. “Unfortunately, in the current crisis, I don’t think the BBB has covered itself in glory by any stretch of the imagination.”
Another Tory MP heavily involved in creating the business rescue plans warned there is growing unrest among some backbenchers over the BBB, saying it is “not fit for purpose”. He said: “I’m yet to speak to anybody who thinks it is a well-functioning organisation and that was clear before this hit.”
Non-bank and fintech lenders have hit hurdles as they seek accreditation by the BBB to grant loans under CBILS.
Oliver Prill, the boss of Tide, warned it is “clearly not set up for anything close to this scale”.
The BBB was due to be grilled by MPs on Tuesday, alongside the Financial Conduct Authority and bank lobby group UK Finance.
A BBB spokesman said: “The BBB has worked at pace with Government and the banks to introduce new loan guarantee programmes that have already provided an additional 103,383 smaller businesses with more than £7.6bn of funding through the Bounce Back Loan Scheme and CBILS, and these numbers continue to grow very rapidly.”