The Funding for Lending Scheme (FLS) has not resulted in a rise in the amount of money being loaned in the UK, new data has revealed.
Figures unveiled by the Bank of England show lending dropped over the course of the last three months of 2012. Net lending by participants over the quarter was down £2.4 billion.
The FLS was set up by the government in conjunction with the Bank of England in a bid to improve the flow of credit to the UK's smaller firms.
Paul Fisher, executive director for markets at the Bank of England, recently claimed it is too early to assess whether or not the FLS has been a success.
He said: "The FLS has clearly shifted the supply of credit: loans are generally available at lower cost than previously. "
The UK government hoped the launch of the FLS would increase the amount of money being lent to small firms, allowing them to grow and boost the economy as a result.
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