Risk-shy banks, firms keep eurozone credit on tight leash

Madrid - The eurozone credit cycle is a whisker away from turning positive but don't expect a rapid recovery. Bank lending to the private sector fell 0.1% in February, data from the European Central Bank (ECB) showed on Thursday, dashing expectations for an increase but inching ever closer to positive growth after nearly three years of contraction.

While ECB President Mario Draghi hailed a resurgent demand from companies for credit this week on the back of his cheap loans for banks, lenders and businesses are more circumspect about the prospects for a strong upswing.

"The scope of lending is not really widening, it's more credit for the same companies," said Camilo Pereira, chairperson of one of Spain's biggest garden centre businesses, Fronda, which has dealings with half a dozen banks.