Non-bank lenders provided €20bn in credit in 2023

More than half was made up of residential mortgages to homeowners at €8.1bn and landlords at €2.2bn

Non-bank lenders dominate the car finance sector in the provision of hire purchase and personal contract plans through car dealers.

Non-bank lenders provided €20bn in credit to Irish households and small businesses in 2023, according to new analysis by the Banking & Payments Federation Ireland (BPFI).

Based on data from the Central Bank, the BPFI said non-bank lenders account for about 15% of outstanding credit. 

Encompassing a large and diverse group of financial enterprises, non-bank lenders do not offer deposit accounts, but provide a wide range of credit facilities for consumers and SMEs.

Without deposits to loan out, most of these organisations rely on funding from their parent group which are likely to be international banks or manufacturers of motor vehicles or other equipment such as farm or construction machinery or office equipment.

Outside the pillar banks, non-bank lenders manage almost 45,000 homeowner mortgages along with a wide range of consumer credit products such as credit cards, personal loans, and asset finance. 

They also dominate the car finance sector in the provision of hire purchase and personal contract plans through car dealers.

More than half of the €20bn was made up of residential mortgages to homeowners at €8.1bn and landlords at €2.2bn. 

About one-third of the value of new lending to SMEs and one-fifth of the value of outstanding credit (€4.5bn) came from non-bank lenders in that year.

Non-banks and specialist banks also accounted for 72% of the outstanding value of personal asset finance, mainly car finance, valued at €3.5bn.

BPFI chief Brian Hayes said non-bank lenders have established a strong presence in the Irish market and are a vital segment of the financing eco-system driving greater choice and competition. 

"This is clearly demonstrated by the fact that credit from these lenders accounted for about 15% of all outstanding household and SME credit at the end of 2023," he said.

“Non-bank lenders also play a key role in funding SMEs in Ireland, accounting for about one-third of the value of new lending and one-fifth of the value of outstanding credit to the end of 2023. 

"They provide a broad range of credit products to small businesses including business leasing, loan, mortgage, and working capital finance as well as substantial credit support to key business sectors such real estate and construction, the retail and wholesale trade, and administrative services," Mr Hayes said.