Essential insights have emerged from the October edition of the Credit Market Survey by the Banco de Portugal. The report summarizes the third quarter’s outcomes and provides projections for the period from October to December.
The survey results, which assess supply and demand between July and September compared to the previous three months, indicate that demand among individuals remained “unchanged.”
Despite an aggregate stability, there was an increase in housing demand due to a “slight influence of interest rate levels and the regulatory and fiscal framework in the housing market.”
For companies, interest rates also contributed to a rise in demand, notably among small and medium-sized enterprises (SMEs).
“Conversely, the resort to internal fund generation as an alternative financing source slightly decreased demand,” noted Banco de Portugal.
In SMEs, investment financing needs and funds for inventories and working capital drove demand higher, whereas large companies experienced a slight decline due to debt issuance.
For the fourth quarter of 2025, Banco de Portugal notes that the sector anticipates increased demand for loans by businesses, particularly long-term loans for SMEs.
Among individuals, a slight increase in demand for housing is expected, with consumption and other purposes remaining unchanged.
On the supply side, lending criteria remained “unchanged for both corporate and individual loans,” with minor shifts easing restrictions for SMEs and slightly tightening those for housing, albeit insufficient to impact the overall landscape.
In credit terms and conditions, both SMEs and large enterprises experienced a slight reduction in interest rates and spreads on medium-risk loans, while these remained stable for individuals.
The proportion of rejected loan applications remained steady for both businesses and individuals.
For the final three months, Portuguese banks anticipate “slightly less restrictive credit criteria for SMEs” and short-term loans, though without an aggregate impact, and foresee no changes in personal loans.
