US Gov’t Eyes Boost in Small Business Lending
US Federal Reserve Chairman Ben Bernanke said on Monday that the agency is now looking for ways to boost small businesses lending, which in turn could pickup the pace of economic recovery and reduce unemployment rate in the country.
The United States Federal Reserve on Monday disclosed that it is now looking for ways to boost small businesses lending, which in turn could pickup the pace of economic recovery and reduce unemployment rate in the country.
Federal Reserve Chairman Ben Bernanke said that the output from these small businesses is the critical ingredient to the economic recovery that continued to elude the country, months after the financial crisis.
“More must be done. Making credit accessible to sound small businesses is crucial to our economic recovery,” Bernanke said.
Small and medium enterprises often rely on financial loans from banks in order for them to expand their operations and hiring capabilities. History also told that SMEs are the key factors in job creation during recovery process.
However, Bernanke said that tight credit from banks and other financial institutions is hurting the hiring capability of many of the SMEs in the US.
“Small and medium businesses accounts to more than half of the employment in the country and accounts to about 60 percent of the gross job creation,” the official added.
With this, Bernanke urged banks to beef up its lending to creditworthy small businesses, particularly those less than two years old since they accounted for roughly one-quarter of gross job creation past 20 years.
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