More new business loans, fewer credit constraints
23 September 2024 - 4 min Reading time
The outstanding volume of business loans at the end of June 2024 increased by 1.8% compared to the previous year, reaching €193.1 billion.
In the second quarter of 2024, businesses requested 1.6% more loans than during the same period in 2023, with the total amount of these requests increasing by 10.6%.
The number of loans granted also increased. In the second quarter of 2024, 2.1% more loans were granted compared to the same quarter of the previous year. However, the amounts granted were 3.6% lower, which is entirely due to an exceptionally high amount granted in the second quarter of 2023, affecting the comparison between the two quarters.
The refusal rate in the second quarter of 2024 reached its lowest level for any second quarter since 2018.
Outstanding amount of business loans remains at a high level
At the end of June 2024, the outstanding amount of loans used by businesses, including commitment credits, amounted to €193.1 billion, representing an increase of 1.8% compared to the previous year.
Increase in credit demand and production
In the second quarter of 2024, entrepreneurs requested 1.6% more loans compared to the same period last year. In fact, the amount requested increased by 10.6%.
The number of loans granted increased by 2.1% in the second quarter of 2024 compared to the same quarter of the previous year. However, the amounts granted were 3.6% lower than those of the same quarter of the previous year, but this can be explained by an exceptionally high loan granted in the second quarter of 2023. This affects the comparison between the two quarters of 2023 and 2024.
Entrepreneurs face fewer credit barriers
The refusal rate in the second quarter of 2024 reached its lowest level of any second quarter since 2018.
The results of the quarterly survey by the National Bank of Belgium (NBB) regarding businesses’ perception of credit barriers also indicate that banks have slightly eased their credit conditions. The proportion of businesses perceiving credit conditions as unfavorable was 20.7% in July 2024, compared to 25.5% in April 2024.
This perception began to increase significantly at the end of 2021, largely due to rising interest rates. From the end of 2023, interest rates started to show a slight downward trend, which was reflected in this perception of credit barriers.
Regarding the evolution of the perception of these credit barriers, a decrease indicates a perceived easing of credit conditions. An increase, on the other hand, indicates that businesses believe it is less advantageous to obtain credit.
According to businesses, all components of credit conditions improved in the second quarter of 2024. An increase indicates a favorable evolution of credit conditions.
Interest rates have slightly decreased
The weighted average interest rate on new business loans peaked at 4.66% in November 2023. By July 2024, this interest rate had fallen to 4.34% (compared to 4.36% in June 2024).
