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TORONTO (Reuters) - Commercial borrowing by small and medium-sized businesses in Canada fell for a fourth straight quarter as the country began to feel the impact of a slump in oil prices, data from PayNet showed on Thursday.
A dramatic drop in oil prices in recent months has weighed on the energy sector and the broader resource-driven Canadian economy, prompting the Bank of Canada to cut interest rates last month.
PayNet, which tracks commercial financing for millions of small and medium-sized businesses in North America, said its Canadian Business Lending Index slipped 2.4 percent to 204 in the fourth quarter, from 209 in the previous quarter.
Borrowing levels had climbed steadily after the global financial crisis to hit a high point in the fourth quarter of 2013, before starting to lose momentum. They are now about 8 percent off those peak levels.
“This is a real correction going on, it’s not just a head fake,” Bill Phelan, president of PayNet, said.
“There’s going to be more pain before growth, but we don’t see this signaling a recession,” he added.
Moderate loan delinquencies, those that are behind in payments by 30 days or more, climbed to 2.2 percent of loans in December, from 2.1 percent in the previous month.
Loans that were more than 90 days late, which are considered loans in severe arrears, rose to 0.5 percent.
Editing by Meredith Mazzilli