20/11/2009 - Credit insurance scheme may be axed
The Government's credit insurance scheme looks likely to be scrapped after only £18 million of £5 billion of available cover was used by UK businesses.
The scheme was designed to help companies that were facing a reduction in trade credit cover and was announced in the Budget in April. At the time, critics of the scheme said the focus was too narrow and that firms were more likely to have credit insurance completely removed and not reduced.
As the scheme looks to have failed to attract interest and expires at the end of the year, it seems unlikely that it will be extended in December's pre-Budget report.
Lord Mandelson hit out at major insurers for failing to support the market for trade credit insurance and said the "market is beginning to change, which suggests the sort of cover we put in place is no longer needed".
Bibby Financial Services, an invoice finance firm, described the shortfall as "a huge wasted of funding".
Copyright © Press Association 2009
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