Three-quarters of UK fintechs criticize lack of government support during the pandemic
- A new survey reveals that most UK fintechs are critical of the government's support schemes during the pandemic.
- And the lack of government aid is creating an uneven playing field, where only larger fintechs can capitalize on rising fintech adoption.
Only 25% of respondents surveyed by fintech network and lobbying group Digital
The lack of government aid is all the more harmful to smaller UK fintechs amid the drop in private funding.
- Many fintechs are ineligible for government assistance. Thirty-seven percent of respondents said they could not qualify for a government loan. The Coronavirus Business Interruption Loan Scheme (CBILS), for example, isn't available to fintechs with a banking license, full-stack insurtechs, or those with unviable borrowing proposals, such as running a loss-making model. In addition, the UK Treasury recently blocked alt lenders' access to cheap finance from the Bank of England Term Funding Scheme, making it harder for them to meet small businesses' financing needs.
- And what remains of dwindling private funding is going toward established fintechs. Forty-six percent of respondents cited limited access to capital as their most pressing challenge. UK funding dropped by 39% in H1 2020, and while this affects all fintechs, the lion's share went to a select few established players, including Starling Bank and Revolut. As a result, small UK fintechs in particular are faced with limited cash runway, exacerbating the need for government support.
Want to read more stories like this one? Here's how you can gain access:
- Join other
Insider Intelligenceclients who receive this Briefing, along with other Fintech forecasts, briefings, charts, and research reports to their inboxes each day. >> Become a Client
- Explore related topics more in depth. >> Browse Our Coverage
- L’Oréal Paris and ambassadors Aditi Rao Hydari, Sobhita Dhulipala, Shakti Mohan and Mithali Raj share their heartfelt gratitude for heroes on International Nurses Day
- This cryptocurrency is valued at $45 billion, and it's just a day old
- India's geo imaging satellite launch delayed due to rising COVID-19 cases
- Gartner report reveals global chip shortage may continue till Q2 2022
- COVID-19: Gurugram, Faridabad and Sonipat districts in Haryana worst hit with new infections