BRIC nations far outstrip G8 in loans to businesses

The value of loans to businesses in the UK has slumped by 13 per cent since the collapse of Lehman Brothers, the second fastest fall among the G8 nations, new research has shown.

Outstanding loans to British businesses now stand at US$673 billion (about £424.8bn), down from $775bn in December 2008, accountancy network UHY said.

In contrast, all the BRIC nations have increased their lending to businesses by double digits in the last three years, with China leading the way. Of the major developed economies, only the US has seen a faster fall in business loans.

The research shows that the BRIC nations have, on average, increased business lending by 62 per cent since December 2008 compared with the G8 nations, which have, on average, decreased funding to businesses by 4 per cent over the same period.

However, some EU countries – including Italy and France – actually increased the value of loans to businesses, despite many of their banks being financially impaired by the sovereign debt crisis in the eurozone.