Chuka Umunna – 2014 Parliamentary Question to the Department for Business, Innovation and Skills

The below Parliamentary question was asked by Chuka Umunna on 2015-01-15.

To ask the Secretary of State for Business, Innovation and Skills, pursuant to the Answer of 1 October 2014 to Question 206270, what the operational responsibilities of lenders under the Enterprise Finance Guarantee Scheme are; and what steps his Department has taken to ensure these are upheld.

Matthew Hancock

We require all lenders participating in the Enterprise Finance Guarantee (EFG) scheme to give clear and accurate information to borrowers and to ensure that their customer-facing staff understand the way in which the scheme operates. Lenders are provided with a comprehensive EFG scheme manual and are subject to a continuous cycle of independent external audit to monitor their compliance with the scheme terms. Following evidence of concerns of lending by the Royal Bank of Scotland (RBS) in August 2014, my officials asked RBS to instigate an internal review into this issue, and the Secretary of State has subsequently met with RBS to discuss these findings.

EFG lenders follow their normal procedures according to internal policies throughout the administrative lifecycle of an EFG-backed loan. Lenders confirm eligibility of applicants and provide a transactional record to the British Business Bank – which now administers the programme on behalf of the Department – through an on-line tool. Regular dialogue is maintained between the British Business Bank and the lenders.