Economy, interest rates threaten loan growth


How will Canadian business lending grow as interest rates rise, global economic and political uncertainty increases, and the country’s economy shows signs of slowing?

Chief financial officers (CFOs) of Canadian banks are weighing in on the issue after the country’s economy grew at a slower pace in the second quarter than forecast in estimates compiled by Bloomberg — 3.3% vs. 4.4% — Bloomberg reported Thursday (September 1).

Canadian companies are using credit facilities rather than bond markets, according to the report. From March to June, loans from non-financial corporations rose 2.73% while debt securities outstanding fell 0.2%, according to the report.

Year-to-date, bond issuance by non-financial corporations has been proceeding at the slowest pace in six years, the data showed.

PYMNTS research released in December found that Canadian businesses were struggling to overcome the slowdown in accounts receivable due to the pandemic, and that 20% of all Canadian businesses reported experiencing days of backorders (DSO ) longer at that time than they did just before March 2020.

Read more: Canadian businesses view virtual cards and real-time payments as key to reducing DSO

The research also revealed that 37% of all Canadian businesses said they were “very” or “extremely” interested in real-time payments, and that the number one benefit they hoped to gain from using them was the ability to make and receive payments 24 hours a day. 7 all year round.

“Most small businesses fail because they can’t access credit,” Nuula CEO Mark Ruddock told PYMNTS in October. “There are a lot of big companies that have failed, simply because at that time they couldn’t unlock the credit they needed.”

See more : FinTech Nuula opens a store in its home country, Canada

In June, Nuula, which offers tools and facilitated capital for small businesses, announced that it had started doing business in Canada.

“Nula’s unique app-based approach delivers a suite of financial products and services designed specifically to meet the needs of small businesses and the entrepreneurs who run them,” Ruddock said at the time.

New PYMNTS Study: How Consumers Use Digital Banks

A PYMNTS survey of 2,124 US consumers shows that while two-thirds of consumers have used FinTechs for some aspect of banking, only 9.3% call them their primary bank.


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