By Eamon Quinn
The overall volume of loans taken out by Irish SMEs continues to fall into its seventh year as interest rates they are charged on their new loans remain the highest in Europexx and are more expensive than the charges faced on existing loans.
Central Bank figures show that outstanding credit fell to €26.4bn even though the increase in new lending to SMEs has unsurprisingly swung positive, growing by €3.7bn in the final quarter of 2017 from a year earlier.
The stock of SME credit includes €10.4bn in property and construction loans and €15.8bn in what the Central Bank calls “core lending”.
Total lending to wholesale, retail and repairs firms fell in the year, in particular, as they paid back more than they borrowed.
Opposition politicians are increasingly focusing on the fate of Irish-owned SMEs which are among the e The Central Bank figures show little improvement.
It said that “the weighted average” cost of new lending for SMEs, which were not involved in financial services, was at 4.1% in the final quarter. That’s down 16 basis points, or 0.16%, from a year ago.
SMEs involved in health and social work saw very decreases in the cost of their new loans, by 276 basis points, or 2.76%.
“Rates on new lending remain higher that the rate applied to the outstanding stock of non-financial SME loans, which was 3.26% at end quarter four 2017,” the bank said.