The flagship National Loan Guarantee Scheme, initiated to as a means to provide SME’s with affordable low interest loans has failed to see a reduction of interest rates on business loans.

The scheme created shortly before the March budget is designed to reduce interest on small business loans by one percent with up to £20 billion available to underwrite the scheme.

However three months after the creation of the programme interest rates have actually increased, while only nine banks have signed up to the scheme. Chief executive of Syscap, Philip White, said: “The NLGS has not yet had the hoped-for impact on borrowing costs for small businesses.”