The ghosts of the GFC continue to haunt businesses and consumers, with more opting to pay down debt over taking out new loans.
Total new lending, including personal, business, housing and lease, fell 1.4 per cent in April, to be down 6.9 per cent from a year ago.
CommSec chief economist Craig James says the 2008 global financial crisis is still affecting the collective psyche.
"When you consider how low interest rates are, the fact that lending is still struggling to push ahead of the highs recorded seven and a half years ago is quite remarkable," he said.
But amongst the caution there are some standout areas.
Consumers borrowed a record $15 billion over the past year to buy new or used cars.
And in business, loans to the rural sector totalled $23.3 billion over the past year, just below historic highs.
"Record car affordability is boosting car sales," Mr James said.
"And keen global interest in Australia's food and beverage products are driving interest in the farm sector."
Broader business lending has slowed over the past five months from eight year highs.
"The pull-back in lending is something to monitor, and serves to keep rate cuts on the agenda," Mr James said.
The April report precedes the Reserve Bank's May decision to drop the cash rate to a new all-time low of 1.75 per cent.
"We will need to wait a few more months to see how both the rate cut and budget measures have affected lending," Mr James said.
The value of new personal loans surged 5.0 per cent in April to $7.7 billion.
Commercial loans, which include investor housing finance, slumped 3.3 per cent to $41.4 billion in the month, while lease finance rose 0.4 per cent to $557 million.
Housing finance for owner occupiers edged up 0.1 per cent to $20.7 billion, according to seasonally adjusted numbers from the Australian Bureau of Statistics.
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