by business editor Trevor Sturgess

Small firms - the backbone of the Kent economy - are calling for easier and cheaper credit.

They welcomed plans for a National Loan Guarantee Scheme to provide up to £40 billion of bank loan guarantees but insisted they go further.

The scheme, recommended in the Independent Commission on Banking (ICB), should target small firms, said the Federation of Small Businesses for Kent and Medway which called them the "backbone of the Kent economy."

Ninety per cent of FSB Members turn over £1 million or less, while the average amount borrowed by FSB members over 12 months is around £25,000.

Roger House, FSB Chairman for Kent and Medway said 33% of firms requesting a loan were turned down while 21% of those who did get a loan had to pay interest rates of 10% or higher.

"The National Loan Guarantee Scheme should be run in a way that encourages competition outside the major players who currently dominate the market," he said.

It should increase credit to hard-to-reach sectors such as start-ups, rural areas and sites of industrial decline.

He wanted Kent MPs to contact the Chancellor and spell out the specific measures being taken to ensure the scheme meets these important objectives. It was vital for finance to reach Kent small businesses which are "most in need of access to affordable credit."

Meanwhile, Which? welcomed the proposed ring-fencing of retail banking.

"People are sick and tired of losing money on bailouts and want their savings to be protected from risky investment banking," it said.