World Bank Report Assesses UK as One of Best Locations for Business Lending

The World Bank 2013 Doing Business report cites the UK as one of the world’s three best jurisdictions for obtaining credit. But the report does not give the full picture, argues Russell Bedford International chairman Geoff Goodyear.


London, United Kingdom, November, 2012 –(– Now in its 10th year, the World Bank Doing Business report series assesses regulations affecting domestic firms in 185 economies, ranking each on the basis of various criteria including ease of starting a business, insolvency resolution and cross-border trade.

The latest report, Doing Business 2013: Smarter Regulations for Small and Medium-Size Enterprises, shows the UK again at the top of the rankings (with Malaysia and South Africa) on the ease of obtaining credit – a position Russell Bedford International chairman Geoff Goodyear feels might be misinterpreted. “Russell Bedford firms have contributed to the World Bank Doing Business survey since 2009, and we’re proud to do so. But the report does not give the full picture regarding access to credit and its real cost. It may be the case, as the report suggests, that the regulatory environment for obtaining credit in the UK is better than anywhere else in the world. However, other research suggests German companies find it far easier to secure credit, while American businesses pay considerably less for it than their UK competitors.”

The Doing Business report assesses two key criteria in facilitating access to credit: the legal framework for secured transactions, and the coverage, scope and quality of credit information available. On that basis, Germany is ranked in 23rd place, well behind the UK and US. Other research paints a very different picture, however. Data from the European Central Bank indicates Germany is the only country not suffering from the current squeeze on credit, with the most recent ECB SAFE Survey showing 80 per cent of German businesses receiving the full amount of loans applied for. And the same report suggests Germany is the only country showing a reduction in the rates charged for bank loans or overdrafts. At the same time, the UK’s quarterly SME Finance Monitor shows that British SMEs are paying an average 4.4 per cent above base rate, whereas Federal Reserve data suggests American businesses are paying an average effective loan rate of just 2.28 per cent.

“A full examination of the availability of credit worldwide – and the real cost – might force governments to realise its impact on the competitiveness of SMEs,” argues Goodyear.

About Russell Bedford International

Established in 1983, Russell Bedford International is a global network of independent firms of accountants, auditors, tax advisers and business consultants. Ranked amongst the world’s leading accounting and audit networks, Russell Bedford is represented by some 460 partners, 5000 staff and 280 offices in more than 90 countries in Europe, the Americas, the Middle East, Africa and Asia-Pacific. Russell Bedford International is a member of the IFAC Forum of Firms and a member of EGIAN, the European Group of International Accounting Networks and Associations.

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