OTTAWA — Lending to small Canadian businesses picked up in April, boosted by activity in consumer-related sectors and suggesting growth in the broader economy was gaining momentum, data showed on Friday.

The PayNet Small Business Lending index rose to 120.1 from 118.7 in March. The index was up 1 per cent compared to a year ago, the first annual gain in 16 months.

"When these small businesses are investing and expanding, that means that there's lift in the overall economy," said PayNet President Bill Phelan.

The index of medium-sized firms pulled back to 233.0 in April from 242.3 after rising for the previous five months in a row.

Among the small businesses, industries tied to consumer spending fared best, including the retail sector, which rose to 182.2 from 180.8, and the professional services sector, which increased to 399.6 from 396.1.

Still, the sustainability of growth in the economy remains fragile with sectors such as manufacturing and wholesale remaining lackluster, said Phelan.

The overall financial health of small companies remained strong, with the 30-day delinquency rate edging down to 1.09 percent from 1.10 per cent.

The number of firms that were 90 days or more behind held steady at 0.35 per cent.