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SMEs continue to struggle to get their hands on credit through the scheme that was set up lasy year with the aim of improving the flow of funds to small businesses.
The latest figures charting the progress of Project Merlin indicate that in the three months to November last year the level of demand for credit from SMEs dropped by 35% with even the largest firms revealing in the Bank of England's Trends in Lending report that they were finding it hard to get access to funds.
In the year to November lending to all businesses dropped by 2.1% with the economic landscape being blamed for a drop in confidence and a reduction in both demand and availability of credit.
Project Merlin was meant to increase the commitment from the large high-street banks to deliver money to SMEs in recognition of the difficulty small firms were having getting hold of cash.
This was followed up late last year with plans to make more funds available through a credit easing programme, which was one of the main announcements in the Chancellor's Autumn Statement.