Companies are finding it easier to borrow money, according to figures from the Central Bank which showed new lending to businesses exceeded loan repayments in May and June for the first time in 10 months.
The data, which replaces the bank’s previously published monthly statistics, aims to give a more accurate picture of credit flows within the economy.
The figures showed net new lending to businesses stood at €424 million in June, up from €380 million the previous month.
The positive figures recorded in May and June reflect a shift on the previous 10 months, when loan repayments were consistently higher than new loan draw-downs.
The data showed total lending to businesses on an annual basis continued to decline in June but at a more moderate rate.
Credit to businesses fell 2.5 per cent year on year in June, compared to 3.9 per cent the previous month.
Loans with a maturity of five years saw the sharpest decline, falling 11.3 per cent while short-term loans of one year, which includes the use of overdraft facilities, turned negative for the first time in June, recording an annual change of -0.7 per cent.
The net flow of lending to households was -€904 million in June, as households continued to spend more on servicing existing loans than they recieved in new lending.
The annual rate of change in loans to households was -4.1 in June, compared to -3.1 in May.
Underlying the annual trend for households was a 1.5 per cent drop in mortgage lending which accounts for three quarters of the total stock of outstanding loans to households.
Lending to the sector for consumption purposes, including credit card debt, declined by 13.1 per cent, compared with -10.1 per cent in May.
Lending to the household sector for other purposes, which included lending to sole traders and loans for investment, declined by 12.6 per cent in June.