Bank lending to households declined by 4.3% in the year to August, new Central Bank figures show.
Mortgage lending was down 2.3% on an annual basis, while other types of bank lending fell by 10.3%.
The Central Bank said that households’ repayment of debt continues to outstrip credit supply. Households’ repayments outstripped credit draw-downs by €411m last month – mainly driven by a fall of €234m in mortgages.
Alan McQuaid, economist with Merrion Stockbrokers said the latest figures show that there is still little progress being made in terms of advancing loans to households.
“As a result, this will severely hamper the overall recovery prospects for the housing market and the Irish economy as a whole, and keep the unemployment rate higher than it would otherwise be,” the economist said.