New Central Bank figures have found that lending to small and medium-sized businesses (SMEs) has been falling in recent months, and at a faster rate than lending to households and other businesses.
The bank today published the first of a new series of statistics on lending to small firms, which showed that lending to 'core' SMEs - those outside the financial and property sectors - fell by 4.5% during the six months to the end of September. This means that firms re-paid more on loans than they drew down during the period.
The Central Bank figures found that the hotel and restaurant sector had the largest share of SME lending in the six-month period, followed by the wholesale/retail sector. These accounted for more than half of lending to SMEs, while companies in the manufacturing, transport, communications and business services areas each had a share of less than 10%.
The bank said lending to SMEs was falling despite some evidence that some financial institutions were trying to increase lending to the sectors.
The Irish Banking Federation said the figures suggested that SMEs were trying to reduce their level of outstanding borrowings and that there was reduced demand from small firms for credit.
