Bank referral scheme: Difference between revisions
Timtomhiggo (talk | contribs) m Added in latest news. |
m WP:CHECKWIKI error fixes using AWB (12100) |
||
| Line 2: | Line 2: | ||
{{globalize/UK|date=October 2016}} |
{{globalize/UK|date=October 2016}} |
||
The government-mandated '''Bank Referral Scheme ''(Designated Platforms)''''' was created by the Small Business, Enterprise and Employment Act 2015<ref name=":0">[http://www.legislation.gov.uk/ukpga/2015/26/section/5/enacted Small Business, Enterprise and Employment Act 2015 2015 c. 26PART 1Financial information about businessesSection 5]</ref> to allow the UK government to track businesses and their requests for [[Corporate finance|business finance]]. The scheme was launched on |
The government-mandated '''Bank Referral Scheme ''(Designated Platforms)''''' was created by the Small Business, Enterprise and Employment Act 2015<ref name=":0">[http://www.legislation.gov.uk/ukpga/2015/26/section/5/enacted Small Business, Enterprise and Employment Act 2015 2015 c. 26PART 1Financial information about businessesSection 5]</ref> to allow the UK government to track businesses and their requests for [[Corporate finance|business finance]]. The scheme was launched on 1 November 2016 after months of delay and more than two years of deliberation.<ref>{{Cite news|url=http://www.altfi.com/article/2361_bank_referral_scheme_goes_live|title=Bank referral scheme goes live - AltFi News|newspaper=AltFi|access-date=2016-11-02}}</ref> |
||
== The statutory format of the referral scheme == |
== The statutory format of the referral scheme == |
||
| Line 29: | Line 29: | ||
The scheme which was included in the Small Business, Enterprise and Employment Act 2015<ref name=":0" /> was given [[Royal assent|Royal Assent]] in March 2015 but not expected to be implemented until October 2016. |
The scheme which was included in the Small Business, Enterprise and Employment Act 2015<ref name=":0" /> was given [[Royal assent|Royal Assent]] in March 2015 but not expected to be implemented until October 2016. |
||
The scheme was launched on on |
The scheme was launched on on 1 November 2016.<ref>{{Cite news|url=https://www.theguardian.com/small-business-network/2016/nov/01/bank-turned-down-small-business-loan-alternative-funding-referral|title=Bank turned down your small business loan? Now it must offer an alternative|last=Sheppard|first=Emma|date=2016-11-01|newspaper=The Guardian|language=en-GB|issn=0261-3077|access-date=2016-11-02}}</ref> The launch came after months of delay due to logistical issues such as; concerns over some of the Designated Platforms not meeting data protection standards needed by the regulators.<ref>{{Cite news|url=http://www.altfi.com/article/2261_bank_referral_scheme_to_go_live_early_next_quarter|title=Bank referral scheme to go live early next quarter - AltFi News|newspaper=AltFi|access-date=2016-11-02}}</ref> The delay launch came after more than two years of logistical problems<ref name=":1" /> which stalled the commencement of the Scheme. |
||
==References== |
==References== |
||
Revision as of 08:04, 3 November 2016
Template:Globalize/UK The government-mandated Bank Referral Scheme (Designated Platforms) was created by the Small Business, Enterprise and Employment Act 2015[1] to allow the UK government to track businesses and their requests for business finance. The scheme was launched on 1 November 2016 after months of delay and more than two years of deliberation.[2]
The statutory format of the referral scheme
The Scheme imposes a statutory duty on UK banks to pass on businesses who have been unsuccessful in applying for finance from a bank to a designated finance platform who will contact them in order to refer them to alternative finance providers.
For the Referral Scheme to perform as envisaged by the UK Government, the businesses affected must give formal permission to the bank to pass on their information to one platform or too many referral platforms. Business owners have expressed concern and confusion as to how the referral scheme will perform in practice.[3]
Concerns
Concerns have centred around the high-interest rates that are charged by alternative finance providers,[4] how confidential information will be treated by the Designated Platforms who are all small start-up businesses[5] and the possibility of being contacted by a number of unknown companies[6] who have had access to confidential business and financial information.
The implementation of the scheme was also been slowed down by multitude of logistical problems such as how and when a bank should refer a business to the alternative finance sector.[5]
How the Referral Scheme will work
Businesses who have been in a credit application process with a bank and been declined credit will be asked for their permission to have their financial information passed to a pool of alternative financial platforms whom in a short regulated time-frame can contact the business to offer them alternative loans. Designated Platforms selected are Funding Options, Funding Xchange and Bizfitech.
If the business then gets turned down by any of the pool of financial platforms then the business information can be passed to all other financial platforms so they can also contact the business to offer them alternative loans.[7]
Background
The idea of the bank referral scheme was advocated by the Liberal Democrats under Nick Clegg with the former Liberal Democrat Business Secretary, Sir Vince Cable hinting at it in March 2014.[8] The then Chancellor of the Exchequer, George Osborne announced in August 2014[9] the scheme; after a five-month industry consultation.
The scheme which was included in the Small Business, Enterprise and Employment Act 2015[1] was given Royal Assent in March 2015 but not expected to be implemented until October 2016.
The scheme was launched on on 1 November 2016.[10] The launch came after months of delay due to logistical issues such as; concerns over some of the Designated Platforms not meeting data protection standards needed by the regulators.[11] The delay launch came after more than two years of logistical problems[5] which stalled the commencement of the Scheme.
References
- ^ a b Small Business, Enterprise and Employment Act 2015 2015 c. 26PART 1Financial information about businessesSection 5
- ^ "Bank referral scheme goes live - AltFi News". AltFi. Retrieved 2016-11-02.
- ^ OWEN, VICKI (14 November 2015). "Bank referral scheme for jilted small businesses faces late".
- ^ McCafferty Ian, Bank of England, speech in Bloomberg, London, 20 October 2015
- ^ a b c Weeks, Ryan (23 September 2016). "Bank referral scheme to go live early next quarter". Altfi News.
- ^ Burn-Callander, Rebecca (10 Aug 2015). "Referrals for bank-jilted small firms still conspicuously absent".
- ^ "Help to match SMEs rejected for finance with alternative lenders". HM Treasury and Department for Business Innovation & Skills.
- ^ "AltFi Europe Summit 2014".
- ^ "Referral System Confirmed as Government Plans for UK to Rule the World of Fintech".
- ^ Sheppard, Emma (2016-11-01). "Bank turned down your small business loan? Now it must offer an alternative". The Guardian. ISSN 0261-3077. Retrieved 2016-11-02.
- ^ "Bank referral scheme to go live early next quarter - AltFi News". AltFi. Retrieved 2016-11-02.