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Property sector accounts for almost half of outstanding business loans

Lending to both small and large businesses in this sector continued to fall over the the last year.

Image: Money house image via Shutterstock

LENDING TO BUSINESSES is down again with the most recent Central Bank figures showing that lending to SMEs that are not related to finance or property fell by €417 million in the first quarter of this year and some €1.6 billion over the year.

However the data shows that credit advanced to enterprises that are not finance or property related increased by €20 million, or 0.1 per cent.

Construction and real estate enterprises saw a 5.1 per cent drop in credit advanced over the year and lending to SMEs in this sector is also down 3.6 per cent in the year.

Deposits held by Irish private-sector enterprises rose by €12.4 billion, up more than 15 per cent in the first quarter. This compares to a much smaller increase of €737 million during the final quarter of last year and was driven by developments in deposits from the financial sector.

The total amount of outstanding loans for Irish SMEs stood at over €70 billion at the end of March with almost half of that related to the property and real estate sector.

As for new loans, a total of €464 million was drawn-down by SMEs who were not part of this sector. The sector with the highest proportion of gross new lending was water supply, sewage, waste management and remediation activities.

Read: Under 50s stop saving as they struggle to pay off mortgages>
Read: Fall in personal loans and holiday home mortgages as households pay off debt>

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