Anthony O’Brien, head of sector research and analysis at the Banking and Payments Federation Ireland (BPFI), has revealed that the average green loan (a loan used for environmentally friendly purposes such as electric vehicles or improving a building’s energy rating) worth €22,432 was more than twice the average personal loan, standing at €12,901, in the first quarter of this year. This bump in value might be due to the high cost associated with green home improvements and electric vehicles.
Green loans have surged in popularity, exhibiting a 38.8% increase in volume since last year. Though they only amounted to €27.1 million in total for the first quarter, the rate of increase suggests a growing trend. In comparison, car loans, which reached a record €208 million in the same period, and traditional home improvement loans, totalling €166 million, were still more substantial in value.
From January to March this year, the total personal loans amounted to €551 million, marking the second-largest quarterly sum since BPFI started logging the data. Personal loans supported various intentions, including car purchases (16,089 loans), home renovations (16,089 loans), and other needs like holidays and education (20,672 loans).
According to Mr O’Brien, green loans represent a financing option for long-term environmental investments, thus explaining their appeal amidst the rising demand for large-scale environment-friendly initiatives such as solar panel installation.