By Daniel Hunter

Lloyds Banking Group has announced that it has beaten its targets under the Merlin agreement, for lending to small and medium sized businesses (SMEs).

This announcement comes following the Bank of England's data that showed the country's leading five banks had, collectively, failed to meet the overall Project Merlin lending figures.

During the 12 month period of the agreement, which began in February 2011, the Group lent £12.5 billion to SMEs, surpassing the higher £11.7 billion capacity target under Merlin.

Separately, the Group has also kept its net lending to SMEs positive at three per cent, while across the industry net lending has declined by six per cent.

For 2012, the Group has made a unilateral commitment to lend at least £12 billion - and to keep its net lending positive - despite the continuing economic uncertainty.

This commitment is uncapped and the Group will lend whatever is required to fulfil demand from viable small and medium sized businesses throughout the year. As part of its SME Charter, the Group has also made a series of pledges help ensure finance remains accessible and affordable.

“The UK’s recovery hinges on the success of small businesses," John Maltby, Group Director, Commercial, Lloyds Banking Group, said.

"And we are resolute in our commitment to making sure they do succeed. We lent £12.5 billion to small and medium sized businesses last year, beating our target of £11.7 billion under the Merlin agreement, and we’ve grown our net lending during a time when, across the industry, net lending has slipped into reverse.

“But that is just the start. We’ve made a unilateral pledge to lend at least £12 billion again in 2012, despite the continuing economic uncertainty. And through our SME Charter we have set out how we will keep lending both accessible and affordable.”

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