Finance Breaking news SME switching scheme falls well short of 120,000 target last financial news
Breaking-Finance.Com - The UK's Incentivised Switching Scheme, which offered sweeteners to SMEs to transfer their business to challenger banks, has signally failed to reach its targets, despite dispensing all but £6 million of a £225 million dowry intended to ease the process.
Breaking-Finance.Com - The UK's Incentivised Switching Scheme, which offered sweeteners to SMEs to transfer their business to challenger banks, has signally failed to reach its targets, despite dispensing all but £6 million of a £225 million dowry intended to ease the process. The switching scheme was part of a package of measures agreed between the UK Government and the European Commission as a condition of the bail out of Royal Bank of Scotland during the financial criss.Run by the Banking Competition Remedies Board, the scheme allocated £275 million to assist SME customers within the Williams & Glynn business to move to challenger banks. This included the £225 dowry for switching business current accounts (BCAs) and an additional £50 million incentive to move loan accounts.ISS was designed to conclude when either 120,000 BCAs switched or when the dowry of £225m was spent. The programme closed to new applicants at the end of February, by which point 57,496 business current accounts had moved to new banks, with a further 19,409 in the process of transferring. Over the two-year period, a total dowry of £206.
.5m and loans £17.2m) and, if all customers do complete the switche, £269m of the available £275m pool will be required.Brendan Peilow, executive director at BCR with responsibility for ISS, says: "The fact that the aspiration to switch 120,000 Business Current Account customers has not been achieved even though the dowries will be almost fully distributed reflects the spread of customers switching across all turnover bands which in itself is encouraging."Businesses currently in the process of transferring accounts have until the end of June to make the switch, or forfeit the dowry endowment.Not all of the remaining SMEs in the count are expected complete their transfer "for a variety of technical and commercial reasons", states the BCR.At this stage, a small surplus of £6m is forecast although this is likely to increase as some customers fall by the wayside. Any surplus funds remaining will be distributed between the top three participating banks with the highest number of switched customers.
Source = Breaking-Finance.ComFinancial breaking news