Access to finance to SMEs at a regional level – the case of Finance Wales

Abstract

Since the economic recession of 2008, there is increasing evidence that small to medium sized enterprises (SMEs) have found it increasingly difficult to access funding from conventional sources such as banks. As a result, there have been various public sector interventions within the UK to close this finance gap, although this has been developed at a national rather than a regional level. This paper examines the development of one of the few publicly owned regional development funds in the UK and its role in supporting the SME sector in Wales during the economic recession. It shows the strategy undertaken was contrary to expectation during a time of economic crisis, especially in the failure to reduce the cost of borrowing to SMEs and to utilise the full range of financial instruments to ensure to maximise its impact.