The Bank of Israel published aggregated results from its quarterly Credit Officers Survey of Israel’s 10 banking corporations, providing qualitative evidence on credit demand and lending conditions in the first quarter of 2025. The survey indicates increased demand for consumer and housing credit, while growth in demand among micro and small businesses moderated, alongside continued easing in credit terms across most segments. Looking ahead to the second quarter, banks expect consumer credit demand to keep growing and housing credit demand to stabilize, with demand rising in the construction industry and falling in the real estate industry. On supply conditions, easing was mainly reflected in margins on non-risky credit, while margins tightened for high-risk housing credit; competitive pressures and high capital ratios were cited as key drivers of margin easing. For demand drivers, increased inventory and working-capital needs remained the primary factor behind higher micro and small business credit demand, and closed-end project financing was the main factor supporting higher construction-sector credit demand.
Bank of Israel 2025-04-09
Bank of Israel releases Q1 2025 Credit Officers Survey showing rising household credit demand and moderated micro and small business demand
The Bank of Israel's quarterly Credit Officers Survey reveals increased consumer and housing credit demand in Q1 2025, with moderated growth among micro and small businesses and eased credit terms across most segments. Looking to Q2, banks anticipate continued consumer credit growth, stable housing credit demand, and rising construction industry demand, with easing supply conditions driven by competitive pressures and high capital ratios.