Fortia Insight (previously RSM UK Consulting) was commissioned to undertake an independent interim evaluation of three ENABLE programmes (ENABLE Guarantee, ENABLE Build, ENABLE Funding) which were launched with the objective to increase lenders’ capacity to provide credit to small and medium sized enterprises (SMEs), overcoming market and regulatory challenges. The evaluation had three aims:
- to assess and review programme delivery
- to assess the extent to which it has facilitated lending to SMEs that wouldn’t have happened otherwise
- to assess the extent to which the programme has facilitated increased financial diversity for SMEs.
ENABLE Guarantee (and Build): This was launched in 2014 (Build was added in 2019) and provides partial loan guarantees to banks and non-bank lenders to reduce capital requirements and stimulate small and medium-sized enterprise (SME) lending. It aims to expand SME lending volumes, help smaller lenders compete with the Big 5 and strengthen financial diversity.
ENABLE Funding: Also launched in 2014, this supports smaller lenders through warehousing of SME receivables, enabling them to refinance via securitisation. It aims to boost lending capacity, diversify finance markets and allow sub-scale portfolios to access institutional investment.
Fortia Insight (previously part of RSM UK Consulting LLP) was commissioned to evaluate both programmes, focusing on delivery, emerging impacts and early value for money.
Methodology
Mixed-method approach across both evaluations: econometric modelling of lender-level data (2011–2023), rapid evidence reviews and extensive stakeholder consultations (more than 20 interviews each)
Event study econometrics to compare pre- and post-participation lending trends
Value for money assessment using the National Audit Office’s ‘three E’s’ (economy, efficiency and effectiveness)
Logic models developed to trace short- and long-term impacts
Challenges
ENABLE Guarantee (including Build)
Complex processes: Governance and approval requirements ensured public money was safeguarded, but added bureaucracy and delays frustrated some partners.
Attribution of impact: While lending clearly increased, it was difficult to isolate how much was additional to what lenders might have done anyway.
Stakeholder engagement: Smaller lenders sometimes struggled to meet compliance requirements, requiring significant support.
ENABLE Funding
Data limitations: Econometric analysis was constrained by weak comparators and limited pre-/post-treatment data, preventing robust statistical attribution.
Long lead times: Benefits often take years to emerge, as lenders need to build sufficient portfolios before securitisation.
Application burden: The process was resource-intensive and deterred some potential partners, particularly smaller finance providers.
Flexibility vs. oversight: Delivery partners valued the bank’s engagement but called for greater flexibility in portfolio parameters and quicker approvals, which were constrained by government oversight.
Impacts
Guarantee (including Build)
- Complex processes: Governance and approval requirements ensured public money was safeguarded, but added bureaucracy and delays frustrated some partners.
- Attribution of impact: While lending clearly increased, it was difficult to isolate how much was additional to what lenders might have done anyway.
- Stakeholder engagement: Smaller lenders sometimes struggled to meet compliance requirements, requiring significant support.
ENABLE Funding
- Data limitations: Econometric analysis was constrained by weak comparators and limited pre-/post-treatment data, preventing robust statistical attribution.
- Long lead times: Benefits often take years to emerge, as lenders need to build sufficient portfolios before securitisation.
- Application burden: The process was resource-intensive and deterred some potential partners, particularly smaller finance providers.
- Flexibility vs. oversight: Delivery partners valued the bank’s engagement but called for greater flexibility in portfolio parameters and quicker approvals, which were constrained by government oversight.
- It helped smaller lenders ENABLE expand and diversify their SME finance offers.
Application and governance processes were effective but often complex and slow due to government approvals.
It was judged ‘good’ value for money, with strong contributions to finance diversity, though additionality remains hard to isolate.
ENABLE Funding
- By March 2023, nine delivery partners (six active) had facilitated finance to more than 79,000 SMEs.
Some lenders grew significantly and cited cheaper funds, but econometric analysis showed no statistically significant overall lending effect (reflecting data limitations and long lead times before securitisation impacts mature).
Application and due diligence processes were lengthy but proportionate; British Business Bank engagement was rated positively.
It was also judged ‘good’ value for money, with clear relational and market-diversification benefits, though long-term outcomes are still emerging.
The British Business Bank team were seen as a positive of the programme. Their thorough engagement processes and responsiveness were particularly appreciated, along with transparency in communication. This is a strength of the programme and one which should be built upon and maintained for other programmes.