PROFESSOR DYLAN JONES-EVANS

Since the 2008 financial crisis that led to the worse economic downturn since the 1920s, the high street banks have introduced more stringent rules regarding credit availability that have reduced the terms of loans and the affordability to many businesses. For example, whilst the average length of a commercial banking loan was approximately nine years for accounts opened in 2008, this was shortened to approximately five years in 2009, and has continued at that level since thus making lending less affordable to many businesses. Indeed, the latest Banking Taskforce Appeals Process Review for the UK has shown that for bank lending above £25,000, nearly half of the businesses cited affordability as the key reason for banks declining their request for a loan. Whilst it seems that little is being done to address the issue of affordability of finance in the UK which is restricting funding to many SMEs, the Irish Government has recently decided to deal with the lack of credit being made ...

In January 2013, the Minister for Economy, Science and Transport announced an independent review into access to finance for SMEs in Wales. Supported by a voluntary advisory panel from academia and business, the aim of the review has been to examine how effectively SMEs in Wales are served by existing sources of funding, identify areas of particular challenge and provide recommendations for action. There are five sections to the report, namely: Banks lending patterns to SMEs Alternative sources of funding The role of Finance Wales The principles of public funding for SMEs the case for a Development Bank for Wales. Over the next five days, I will be publishing each of the sections individually so that those wishing to respond to the review can understand each aspect of the issues surrounding access to finance to SMEs that have emerged from the 10 month consultation. This blogpost will examine the current state of lending by the banks to SMEs in Wales. It will update the...

For many small growing firms, individual informal investors play a vital role in supporting their development. These so-called ‘business angels” are defined as individuals, acting alone or in a formal or informal syndicate, who invest their own money directly in unquoted businesses in which there is no family connection in the hope of financial gain. They also, after making the investment, take an active involvement in the business either as a mentor, adviser or member of the board. They are therefore important additions to the funding market for early stage businesses and potentially, given the reluctance of banks to lend to such firms, have a critical role to play in ensuring a strong private sector-led recovery within the UK economy. Unfortunately, there is very little data available on business angels and their investments on a regional level. The best proxy for this, at least in terms of informal investment by individuals into SMEs, is the Enterprise Investment Scheme (EIS...

For those of us looking as to how Wales can become a more competitive economy, we have examined smaller nations such as Denmark, Sweden or Ireland as examples of good practice. However, very few have ever considered the case of Switzerland, with its population of eight million people, as a nation we should emulate. Indeed, our attitudes may be best encapsulated by the famous lines that Orson Welles delivered in one of his most famous roles as Harry Lime in “The Third Man”. “In Italy, for thirty years under the Borgias, they had warfare, terror, murder and bloodshed, but they produced Michelangelo, Leonardo da Vinci and the Renaissance. In Switzerland, they had brotherly love, they had five hundred years of democracy and peace – and what did that produce? The cuckoo clock." Apart from the fact that the cuckoo clock was not invented in Switzerland, a new book launched in Wales last week suggests we may want to rethink our view of a country that many of us might have ...