Iwoca chief executive Christoph Rieche has called for the fintech industry to be strengthened to support small businesses once the bounce back loan scheme ends.
He said that fintechs can help fill the funding gap of small- and medium-sized enterprises (SMEs) when the government scheme closes for applications at the end of the year and they struggle to obtain finance once again.
Writing in CityAm, Rieche said that there should be a greater level of industry cooperation through the bank referral scheme so that businesses can reach out to a range of lenders to give themselves the best chance of accessing finance.
He called for a level playing field to ensure non-bank lenders can access capital on competitive terms like the large banks can.
And Rieche also urged the finance industry, business groups and government to promote the benefits of open banking to SMEs and to build up trust amongst small businesses looking to use it.
“The launch of the bounce back loan scheme was a watershed moment for hundreds of thousands of SMEs across the country,” said Christoph Rieche, co-founder and chief executive of Iwoca.
“However, if smaller businesses are going to be able to access the finance they need after the scheme ends, then fintechs need to be given a greater opportunity to do what they do best.
“The Covid-19 pandemic has exposed the cracks within the ecosystem of small business support. Bounce back loans managed to paper over these, but we now have an opportunity to fully address these weaknesses and give SMEs the brighter future they deserve.”
Some progress has been made on addressing Iwoca’s concerns.
Last month, open banking reached the landmark of over two million consumers and Tech Nation launched the “Fintech Pledge”, with support from the Treasury, to set global standards for collaboration between banks and fintechs.
In June, it was revealed that Innovate Finance was representing peer-to-peer platforms in talks about non-bank lenders receiving access to cheap funding from the Bank of England.
However, the following month government support for fintechs was questioned after it was reported in the Sunday Times that this access to cheap funding was blocked by large banks.