By Simon Miller

UK banks have missed the small and medium business lending targets according to the Bank of England's Project Merlin figures.

Although lending to businesses totalled £214.9bn in 2011 against a target of £190bn, lending to small and medium business fell short by £1.1bn at £74.9bn.

A spokesman for the banks claimed the shortfall on SME lending was due to a lack of demand for lending which 'remains weak'.

Project Merlin was set up as a committment by banks to provide liquidity to businesses through loans and Barclays, Santander and Lloyds have claimed to have met their share of SME lending.

RBS claims that it favoured a 'stretch' target - believed to be 10% lower - and claims it has exceeded this target rather than its share of the £76bn which it says was the capacity lending limit not actual.

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