Chancellor George Osborne has revealed plans to launch a bank for small businesses.

Speaking on the BBC’s Andrew Marr Show, the Chancellor stated his intention to help UK small businesses obtain the credit needed to grow by creating a government-backed bank that focused on the private sector.

Similar schemes have been introduced in the US, Germany and Ireland, and will form the template for the British version.

Osborne said he hoped the new bank would “bring together all the alphabet soup of existing schemes” available to small businesses.

“The weakness in our banking system is one of the biggest problems we’ve got,” he said. “Small businesses are the innocent victims of the financial crash.”

More details are set to be released in the autumn but Osborne was adamant that this new venture was “not about challenging existing banks and it’s nothing to do with Lloyds or RBS”.

Federation of Small Businesses national chairman John Walker welcomed the announcement. “With a third of businesses missing their growth opportunities as a result of not getting all the credit they need, we believe this bank will help firms grow and invest and get the recovery back on track.”