Designing Open Banking for SME Lending: Lessons From the UK Model

Open banking has the potential to transform lending to small and medium enterprises (“SMEs”) by allowing firms to share real-time financial data with lenders, reducing informational asymmetries and enabling more inclusive credit markets. This policy brief explores the design debate between government-led and market-led open banking models, focusing on their implications for competition, innovation, and access to finance for SMEs. This paper argues that while market-led frameworks offer flexi