UK trade deficit: Lloyds Bank pledges to help 5000 SMEs in 2016 to become first-time exporters

Lloyds Banking Group is said to have recently announced plans to help small and medium enterprises (SMEs) who have never exported their products till date. The British bank has pledged to help 5,000 SMEs in 2016 and 25,000 SMEs by the end of the decade to become first-time exporters.

The bank's export specialists could also provide guidance to these SME's with regards to specific countries where they want to start exports. Apart from this, the British bank is also set to increase its financial lending to SMEs by £1bn (€1.25bn, $1.42bn).

The move is part of the UK government's objective of ensuring that there would be 100,000 businesses by 2020 that would have turned into first-time exporters. Minister of State for Trade and Investment Lord Price said: "This government has committed to having 100,000 more UK companies exporting by 2020, and this pledge by Lloyds is a welcome contribution towards this target. It's great to see the banks doing their bit to support small and medium- sized businesses looking to invest and create jobs."

These initiatives are expected to help reverse the UK's rising trade deficit, an economic measure of a negative trade balance caused as a result of imports surpassing exports. The move comes at a time when Britain's trade deficit in goods with the European Union hit a high of £23.6bn in the three months to January 2016, according to the Office for National Statistics.

These numbers are also the highest since 1998. The reason for this is supposed to be a fall in exports from the country. Only 20% of the five million companies in the UK are said to be engaged in exports. This is less when compared to Germany, the country considered a leader when it comes to exports in Europe, where 25% of its companies export their products, according to The Telegraph.

Gareth Oakley, managing director of SME banking at Lloyds, said: "The future success of the UK economy hinges on small businesses looking to overseas markets for growth. Through this new pledge, we want to support a new legion of UK exporters, and ultimately to help the UK economy to prosper."