Commenting on the ‘Independent Review of the Availability of Funding for SMEs in Wales: Stage 2 Report’ by Professor Dylan Jones-Evans which was published today, Welsh Liberal Democrat Shadow Business Minister, Eluned Parrott AM, said:
“Dylan Jones-Evans’s report will make uncomfortable reading for Finance Wales, and raises serious questions about how effectively Welsh Government support has been offered to Welsh businesses.
“In particular, I cannot understand why Finance Wales has apparently routinely been offering loans at interest rates far higher than commercial banks. Two reasons have been given for the practice: the level of risk, and State Aid rules set down by the EU, but neither excuse holds water.
“In terms of risk, where Finance Wales has been jointly funding projects with a commercial bank, it has charged up to twice the rate of interest, but the level of risk is the same for them as it is for the bank. In terms of State Aid rules, the Minister was able to reduce the rate of interest charged in Enterprise Zones without breaching the rules, and I would contend that she could intervene to reduce rates across Wales without doing so as well.
“Access to finance is the life-blood of the economy, allowing businesses to action their plans to grow. It is clear now that Finance Wales has been a block in that flow, and not the support we needed it to be. While it may want to consider more drastic action in the medium term, the Welsh Government must act to cut interest rates right now, and allow Welsh businesses to take advantage as the UK economy recovers.”
