What's Happening?
A report by Oxford Economics, commissioned by Allica Bank, reveals that the bank's lending to small and medium-sized enterprises (SMEs) in the UK contributed £5.8 billion to the economy in 2024. This lending activity
supported over 84,000 jobs across the country, equivalent to one in every 440 jobs in the UK, and generated £1.4 billion in tax revenues. The report highlights the role of challenger banks in driving economic growth, as traditional banks have reduced their involvement in SME financing. Allica Bank's lending has been particularly impactful in regions outside London, supporting thousands of jobs in areas like the North West, West Midlands, and East Midlands.
Why It's Important?
The findings underscore the significant impact challenger banks like Allica Bank have on the UK economy, particularly in supporting SMEs, which are considered the backbone of the economy. As traditional banks pull back from SME lending, challenger banks are filling the gap, providing necessary financial support that drives job creation and economic growth. This shift in the financing landscape is crucial for regional development, as it helps distribute economic benefits more evenly across the country, rather than concentrating them in London. The report also highlights the importance of productive finance in generating tax revenues and supporting public services.
What's Next?
Allica Bank plans to continue its growth trajectory by expanding its lending activities and capturing a larger share of the SME finance market. The bank aims to advance £1 billion of working capital finance to SMEs, building on its momentum as a market leader. Additionally, Allica Bank's recent acquisition of embedded finance startup Kriya is part of its strategy to capture 10% of the established SME finance market by the end of 2028. This expansion could further enhance the bank's impact on the UK economy and support more jobs across various regions.
