Car and personal loans on the rise as borrowing rebounds

ISLAMABAD: Car financing rose 11.72 per cent year-on-year to Rs257.36 billion in April, reflecting signs of recovery in consumer lending despite broader economic pressures. The latest figures from the State Bank of Pakistan (SBP) show a modest month-on-month increase of 2.31 per cent.

Home loans, by contrast, recorded a 2.39 per cent decline from a year earlier to Rs201 billion, although borrowing edged up 0.79 per cent compared to March, when it stood at Rs199.43 billion.

Financing for personal use climbed 12.68 per cent year-on-year to Rs268.29 billion, with a marginal increase of 0.23 per cent on a monthly basis.

Overall, consumer credit reached Rs891.81 billion in April, up 11.11 per cent from the same month last year. On a monthly basis, it rose 2.07 per cent from Rs873.75 billion in March.

Lending to the private sector also picked up, growing 13.17 per cent year-on-year to Rs9.49 trillion. The increase on a monthly basis was minimal, at just 0.02 per cent.

Within the private sector, loans to manufacturers reached Rs5.37 trillion, marking an 11.68 per cent annual increase, although the figure was down 1.06 per cent from March. The construction sector borrowed Rs216.26 billion, up 10.36 per cent year-on-year and 1.64 per cent from the previous month.

Agriculture, forestry and fishing sectors saw sharpest annual increase in borrowing, with credit rising 19.09 per cent to Rs461.15 billion. Month-on-month growth was limited, at 0.16 per cent.

The growth in consumer and private sector lending suggests a gradual pick-up in economic activity, although monthly changes reflect cautious borrowing patterns amid high interest rates and inflation.

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