The award is part of a £775m programme funded by Royal Bank of Scotland as a condition of its bailout during the financial crisis. A total of £425m will be given in cash grants to rival business banks and financial technology companies, while a further £350m is being used to encourage RBS customers to switch to alternative providers.
Nationwide aims to shake up the market by focusing squarely on supporting the UK’s 5.6 million SMEs. Among the products and services it will offer are unsecured loans along with accountancy and cash flow support to assistance with foreign payments.
The society says that it can often take a longer-term view because it is owned and run for the benefit of members, not shareholders.
Joe Garner, chief executive of Nationwide, said: “This is good news for small businesses. The fund gives unprecedented opportunity to accelerate plans and inject competition into this market. As a building society, we are in a unique position as the only mutual with the scale, trust and track record to offer a compelling alternative to the banks.
“While the money is a massive boost for our plan, we also aim to match every pound of the £50 million award with our own funding over a five-year plan. As a mutual organisation driven by our social purpose, it is important that business owners are given more choice to find an account which suits their needs and we look forward to delivering this proposition.”
Andrew Bester, Co-Op Bank chief executive, said: “Our SME banking business is a key priority for us and we see considerable potential for growth. We are committed to more than doubling our current 2pc share of the market over the next five years and look forward to putting our plans into action.”