New lending to SMEs up 5.1 per cent in the year to Q3 2016

30 January 2017 Press Release
  • New lending to SMEs is continuing to grow with quarterly new lending in Q3 2016 5.1 per cent higher year on year.
  • Lending growth highest in manufacturing, hotel/restaurant and construction sectors.
  • Rejection rates across all finance products have increased to 16 per cent, up from 11 per cent.
  • Irish SME interest rates are higher than euro area averages, with the average interest rate declining from 5.9 per cent to 5.5 per cent.

The Central Bank has published the SME Market Report for the second half of 2016.

The report shows that new lending to SMEs is high relative to the period since 2010, with quarterly new lending in Q3 2016 up 5.1 per cent from Q3 2015.  Bank finance applications are declining, and driven by relatively larger falls in applications for renewed/restructured products.  The combined market share of the three main lenders is 93 per cent.

Loan performance is improving. In June 2016 24 per cent of SME outstanding balances were in default, down from 41 per cent in 2013.

Additionally, the report reviews SME investment activity by the Ireland Strategic Investment Fund to date. It also compares SME default rates across Europe and describes the Central Bank’s regulations and protections related to SME lending.