The flow of credit available to businesses declined by €1.3 billion in March, according to monthly data released by the Central Bank this morning.
In its report the bank said lending to non-financial corporates (NFC), ie businesses, fell by €1.3 billion.
The Central Bank said the recent euro area Bank Lending Survey found evidence of a tightening of lending criteria by Irish banks and a failure to pass on ECB rate reductions in full by all mortgage providers.
Overall lending to the private sector fell by €3.9 billion last month bringing the annual rate of lending in March to 2.3 per cent from 4.8 per cent in February. This decline has wiped out increases in the first two months of the year.
The March lending rate was the lowest since January 1994 and compares to growth of 17.1 per cent recorded in March 2008.
The net increase in mortgage lending in March was just €20 million, a historic low, despite significant falls in interest rates and declining house prices.
This brought the annual rate of increase in mortgage lending to 4.2 per cent.
Over the first three months of the year was the net increase in mortgage lending was €428 million compared with €2.6 billion over the same period in 2008.
The level of outstanding indebtedness on credit cards, which has more or less been on a downward slide since October, rose just 1.1 per cent last month, compared with growth of 8.6 per cent 12 months ago.
According to the Central Bank consumers spent 16 per cent less during the first three months of the year compared to the first quarter 2008.
