Public sector driving growth across the lending landscape

The latest analysis by specialist lending experts, Rangewell, has revealed that it's the public administration sector that is one of the key sectors driving growth across the lending landscape, having seen a 26.7% increase in the monthly amount outstanding from UK monetary financial institutions. 

Rangewell analysed the latest Bank of England figures* looking at industrial analysis of monetary financial institutions' lending to UK SMEs as well as individuals and how the lending landscape has moved over the past 12 months.

The latest figures show that, in total, £2.514trn of loans remained outstanding in June 2024. This marked a 0.9% year on year increase, although this figure had been driven by a 1.3% increase in outstanding lending to financial and non-financial businesses versus growth of 0.7% with respect to individuals and individual trusts.

Further analysis of the data by Rangewell shows that when it comes to the industries driving the current lending landscape, the financial intermediation sector sits top with £257.433bn in loans outstanding.

However, whilst this total has increased by 4.7% in the last year alone, it's not the sector to have seen the steepest rate of annual growth.

In fact, the public administration sector has seen the sharpest uplift in outstanding lending, having seen a 26.7% increase annually.

This is followed by the electricity, gas and water supply industry, where outstanding lending has climbed by 17.9% year on year.

The real estate industry ranks third albeit the increase in outstanding lending is not as notable at 5.4%, with just the financial intermediation industry and fishing industry the only other sectors to have seen an increase at 4.7% and 3.4% respectively.

Alasdair McPherson, Head of Partnerships at Rangewell, commented:

"Despite the fact that interest rates have remained at their high of 5.25% until only recently, we've seen a very material pick up in SMEs seeking and gaining external funding since the start of the year.

It's clear that a hold on the base rate since September 2023 has helped to cultivate a much more positive business landscape with respect to lending, as more businesses have taken advantage of this increased stability to fund their future growth ambitions.

Importantly, lenders credit appetite has also significantly increased over the last few months meaning more SMEs are getting more funding at lower rates of interest than was achievable even a few months ago.

This growth has certainly been more pronounced across some industries compared to others, but with rates now expected to fall further almost all sectors should see stronger lender appetite from a larger cohort of lenders as the year progresses."