To ask Her Majesty's Government what assessment they have made of the level of lending by the United Kingdom retail banking sector to small and medium-sized enterprises; and what steps they will take if they conclude it is not lending enough. [HL1255]

SME lending data collected by BIS show that while it is true to say that demand for finance remains subdued and new lending is down comparatively with 2007, the large majority of SME applications for finance are successful.

The Government continue to monitor the situation closely, for example the experiences of both lenders and borrowers are discussed regularly at the Small Business Finance Forum.

While continuing to encourage lending to viable SMEs, the Government have agreed lending commitments with RBS and Lloyds. Lending commitments will also be in place for next year up to March 2011.

In addition, over £750 million of loans have been offered to SMEs through the enterprise finance guarantee, which has been extended to 31 March 2011, and the Government are working to establish a growth capital fund which will supply risk capital to established SMEs of between £2 and £10 million.