UK lawmakers open inquiry into small business lending

LONDON, Feb 21 (Reuters) - British politicians launched aninquiry into the lending practices of banks to small businesseson Friday, following criticism banks are treating firms badlyand not lending enough.

State-backed lender Royal Bank of Scotland has beenslammed for sucking cash out of viable small businesses andother major banks have been criticised for not offering enoughcredit to small and medium sized enterprises (SMEs).

"SMEs report that they are struggling to secure adequateaccess to finance, from banks and elsewhere. It is vital to asustainable economic recovery in the UK that this market berestored to working order," said Andrew Tyrie, chairman of theTreasury Committee.

The Committee said it will be a short inquiry, starting onTuesday, focusing on access to finance for firms, scope foropening up the sector to more competition and the treatment ofSMEs by banks.