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Issued by UHY Victor : March 31, 2021
Banks worldwide increased lending by 10% to help businesses through the pandemic
Lending rises by $3.3 USD trillion across 24 major economies
More help is needed as countries enter renewed lockdown restrictions worldwide
China saw biggest increase in bank lending adding $1.8 trillion USD of business loans in just 12 months
Banks around the world have increased lending by 10% since the start of the Covid-19 pandemic to help businesses survive, reveals a new study by UHY, the international accounting and consultancy network*.
UHY’s study of 24 major economies shows banks increased overall lending to businesses by an additional $3.3 trillion USD in the last 12 months, as governments flood lending markets with money to help businesses through pandemic disruption.
Lending to businesses across the 10 biggest economies reached a total of $32.7 trillion USD last year, an increase of $3.1 trillion USD (10.5%) compared to a year earlier.
Chinese businesses have experienced the largest increase in value of bank lending out of the world’s leading economies. In China alone, outstanding loans to businesses increased by USD1.8 trillion (11%), reaching a total of USD16.04 trillion last year. The People’s Bank of China established its small business loans program in February, offering low-cost funds to commercial banks to lend to businesses.
UHY’s study found that as well as China, other BRIC countries also experienced a particularly large increase in bank lending in the last year – a 12% increase on average. Brazilian banks increased their business lending by 18% ($46.3 billion USD), topping the table in UHY’s study with the largest percentage increase in lending.
BRIC countries outpaced the G7 (9% growth in lending on average), as countries such as Canada saw a decrease in total lending to businesses through the pandemic (-0.3%). G7 countries added an extra $1.2 trillion USD to outstanding loans, reaching a total of $15 trillion USD last year.
The eight major EU economies in UHY’s study are lagging behind other world economies in increasing lending, adding only 5% to outstanding bank lending last year. Outstanding lending stood at $4.9 trillion last year, up from $4.7 trillion USD in the previous 12 months. Countries including Poland (-3%) and Ireland (-7%) have seen a decrease in the value of outstanding bank credit to businesses compared to pre-Covid.
Outstanding lending to businesses across the 10 biggest global economies hit a total of $32.7 trillion USD last year, an increase of $3.1 trillion USD (10.5%).
Banks have increased lending to businesses by 10%, adding $3.3 trillion USD to total outstanding loans in the last 12 months
*Current figures are outstanding loans to businesses at the last available date