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Banks set to meet lending targets

The UK's major banks look likely to meet their small business lending targets as agreed with the Government.

According to the British Bankers' Association (BBA), the main five high street banks (Barclays, HSBC, Lloyds, RBS and Santander) loaned £37.4 billion to SMEs in the first six months of the year.

Under the terms of Project Merlin, to which the banks signed up as part of Government plans to boost the levels of credit and finance available to smaller firms, the target for the whole of 2011 is £76 billion.

A spokesperson for the Merlin banks said: "The first half year performance demonstrates the banks' commitment to providing businesses with the financial support they need to invest and grow and the significant progress made this year.

"The banks' efforts to encourage customers to come forward with borrowing proposals are set against the overall economic environment which remains challenging and business demand for credit which remains weak."