We just announced the results of our quarterly survey of U.S. bank risk officers. It looks like the “credit gap” facing consumers and small businesses isn’t going away anytime soon. Each quarter, we ask hundreds of bankers a series of questions about their expectations for the upcoming six months. In the latest survey, 42% of respondents expected the amount of credit requested by consumers to increase. By contrast, only 31% expected the amount of new credit offered by lenders to increase. What may be even more telling is that 39% of bankers expected approval criteria to become stricter, while just 13% expected approval criteria to loosen.
The survey results were similar for small businesses. Over 59% of those surveyed expected the amount of credit requested by small businesses to increase. By contrast, less than 37% expected lenders to increase the amount of credit for small businesses.
This continues a pattern we’ve seen for several quarters. Based on our conversations with lenders, the credit gap is unlikely to close until lenders put the problems in their mortgage portfolios behind them and see sustained growth in employment.
You can check out the detailed survey results at http://www.prmia.org/PRMIA-News/USConsumerCreditRiskqtr4.pdf.