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£3.4 billion for small firms

Dec 08 2008

HSBC has created a $5 billion (£3.4 billion) fund for small businesses globally, saying it has already lent more to firms than last year.

The bank will aim the new fund at companies in Hong Kong and the UK, adding that it has already lent more to small and medium enterprises (SMEs) than in 2007.

Michael Geoghegan, chief executive of HSBC, says: 'This is a difficult time for business in many economies. Customers are rightly looking to see how banks can help.'

The £3.4 billion of funding represents a £1 billion increase on last year for the organisation and follows a move by the Royal Bank of Scotland to freeze overdraft rates for small companies.

'SMEs are the lifeblood of most economies and it is their success that will create economic growth,' Geoghegan adds.

Business secretary Lord Peter Mandelson says he welcomes the move and urges all banks to keep up good communication with companies.

Lloyds TSB last week promised to maintain lending to small firms by passing on any rate cuts to customers.

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