Banks and other financial institutions continued to lend strongly to the agriculture sector in May, with borrowing by the sector up 17% from May 2008, figures from the Reserve Bank of New Zealand show. However, May was the first month in a year for which agri-credit growth was less than 20% from the year before.

There was almost an extra NZ$500 million lent to agriculture in May from April, which took the total owed by this sector to banks and other financial institutions to over NZ$45.5 billion.

In contrast, businesses paid back more than they borrowed in May, the fifth consecutive month for which this was the case. Credit lent to the business sector was NZ$78.1 billion by the end of the month, down from NZ$78.5 billion at the end of April. Year on year business credit growth for May was 5.1%, having fallen from 12.4% in December.

Consumers also paid back more than they borrowed in May for credit card and installment credit, with outstanding credit having fallen consistently since December. The NZ$12.6 billion outstanding consumer credit was down 1% from April and down 1.3% from the year before. May was the fourth month in a row for which yearly consumer credit growth was negative.

Housing credit grew marginally over the month and yearly growth stopped falling for the first month since June 2007. Outstanding credit of NZ$164.3 billion was up 0.5% from April and 2.9% from May 2008, the same yearly growth as in April. This was down from 14.4% yearly growth in June 2007.

See all our sector credit charts here.

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