(Bloomberg) -- Borrowing by Chinese businesses plunged in the first quarter and interest rates on loans surged to a record despite the central bank's efforts to encourage more lending, according to China Beige Book International.

Only 16% of the companies surveyed by CBBI, a provider of independent economic data, applied for loans in the first three months of 2022, the lowest since the quarterly poll began in 2012, according to a report published Tuesday.

The firms also paid for the most costly loans since 2012 even though the People's Bank of China cut its policy rates early in the year. The average interest rate for bank loans climbed to 8.5% from 6.1% in the fourth quarter of 2021, while those for shadow financing loans surged to 15.1% from 10.7%, according to data provided by CBBI.

The survey paints a grimmer picture of credit demand in the corporate sector than the slowdown reflected in the official data.

"Recent tiny cuts to government benchmark rates may have given the impression that the cost of capital is falling," said Leland Miller, chief executive officer of CBBI. But not all benchmark rates directly affect companies' capital costs, and "lenders that see clouds on the horizon may also not pass on those benefits" to the broader corporate sector, he said.

The survey also offers an alternative to the PBOC's data, which shows the average corporate loan rate in 2021 has declined to 4.61%, the lowest level since China began market reforms over four decades ago.

The interest rates quoted in the CBBI report are the weighted average of all the firms in the survey who reported their loan rates. CBBI interviewed a total of 4,354 companies between January and March this year.

At the same time, pent-up demand for credit -- measured by the share of companies that wish to borrow but nevertheless didn't apply for loans -- rose in the first quarter in all of the surveyed sectors, according to the report.

That reflects the high borrowing costs and implies that companies' appetite for credit may turn around quickly should the PBOC aggressively cut rates, the report said.

"If the PBOC wants to push rates down, it has the wherewithal to push rates down right now," Miller said in an interview with Bloomberg TV on Wednesday. "You actually have returning corporate loan demand, and that could show recovery happens a lot quicker in the spring than people expect."

The survey also shows a surprising acceleration in property developers' profits in the first quarter, with gains seen also in their revenues, sales prices, investment and hiring, according to the report.

(Updates with comments from CBBI chief executive in 10th paragraph.)

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