(Yicai Global) May 6 -- Interest rates on new loans to businesses and individuals in China declined in March, according to a report released today by the country’s central bank.

The People’s Bank of China revealed that the interest rate on loans for personal housing stood at 5.42 percent in the month, 17 basis points lower than at the beginning of the year. The rate on other new household loans was 7.68 percent, down 67 bips on the start of the year and 41 bips lower than a year earlier.

The interest rate on newly issued corporate loans was 4.37 percent in March, 8 bips and 19 bips down from the beginning of 2022 and the same period of last year, respectively. The rate on newly issued inclusive small- and micro-enterprise loans was 4.93 percent, 17 bips lower than that at the start of the year.

Loans in the area of inclusive finance include those for small and micro enterprises with a single credit line of less than CNY10 million (USD15 million), business loans for the self-employed, production and operation loans for farmers, consumer loans for the poor, secured loans for entrepreneurs, and student loans.

In the first quarter, lending to businesses and institutions accelerated, while that to individuals slowed, the PBOC’s report showed.

The balance of personal housing loans was CNY38.84 trillion (USD5.8 trillion) in the three months ended March 31, up 8.9 percent from a year earlier. But the pace of growth was 2.3 percentage points lower than that at the end of the previous year. The balance of other consumer loans was CNY16.42 trillion, climbing 7.1 percent a year ago, with the growth rate 2.4 percentage points down from that at the end of 2021.

The balance of loans issued by Chinese financial institutions in local and foreign currencies stood at CNY129.83 trillion (USD19.5 trillion) at the end of the first quarter, an 11.8 percent year-on-year gain, with the growth rate 0.8 point higher than at the end of the last year.

But the balance of medium- and long-term loans in the service industry was CNY52.22 trillion, jumping 9.2 percent from a year earlier, and the growth rate was 1.8 point lower than at the end of the previous year.

The balance of medium- and long-term loans in the real estate sector fell 1.5 percent from a year ago, a decline of 1 point from the close of 2021.

At the end of the first quarter, the balance of loans in the Chinese yuan inclusive financial sector came in at CNY28.48 trillion, climbing 21.4 percent from a year earlier, but down 1.8 point from the end of the prior year.

Overall, by the end of the first quarter, the balance of Chinese yuan loans of financial institutions was CNY201.01 trillion, up 11.4 percent from a year ago, and the growth rate was 0.2 point lower than that at the end of last year.

The PBOC report did not provide reasons for the changes in the data.

Editor: Peter Thomas