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TORONTO, Feb 17 (Reuters) - Commercial borrowing by small businesses in Canada picked up in December on strength in sectors such as manufacturing and agriculture, data from PayNet showed on Wednesday.
PayNet’s Canadian small business lending index rose to 138.3, from 132.6 in November. The data is collected by small business credit rating agency PayNet as reported by lenders. A small business is defined as one that has less than C$1 million ($719,942.40) in total credit outstanding.
“It’s not booming, but it’s consistent increase by small businesses,” PayNet President Bill Phelan said. “It tells us that ... a big part of our gross domestic product is still putting money to work and expanding.”
Canada emerged from a mild recession in the third quarter, but lackluster activity and the drop in oil prices have prompted concern of another downturn. The Bank of Canada last month said the economy stalled in the fourth quarter.
Small business lending in manufacturing, agriculture and construction showed improvement. In terms of regions, both Ontario and Quebec helped fuel growth.
“These bright spots are showing there are some areas of expansion that are driving this increase for the Canadian economy,” Phelan said. “We’re finally getting to the promise of the shift from commodities to manufacturing.”
Moderate loan delinquencies - those that are behind in payments by 30 days or more - were flat at 1 percent of loans. The number of companies that were more than 90 days behind rose slightly to 0.30 percent. ($1 = 1.3890 Canadian dollars) (Reporting by John Tilak; Editing by Alan Crosby)