More Pakistanis taking car and personal loans as borrowing picks up 

ISLAMABAD: Car financing in Pakistan is picking up again, with more people taking out loans to buy vehicles. According to fresh data from the State Bank of Pakistan (SBP), car loans reached Rs271.24 billion in May 2025, up 3 per cent from April and a solid 16.5 per cent higher than the same month last year.

This rise in car loans hints that people are feelings somewhat more confident about making big purchases again. The auto market had been struggling recently as high prices and economic worries kept buyers away.

In total, banks handed out Rs911.44 billion in consumer loans in May. That’s nearly 14 per cent more than what was lent out a year ago. Even compared to the previous month, there was a 2.2 per cent increase, suggesting that more people are gradually starting to borrow for their needs and plans.  

Loans taken for personal expenses, such as weddings, education, or travel, stood at Rs268.4 billion. That is almost 13 per cent higher than a year ago, though the month-on-month change was very slight.  

Home loans told a different story. People borrowed slightly more for building houses in May compared to April, Rs201.83 billion versus Rs201 billion, but this was still 1.69 per cent less than the amount borrowed in the same month last year.  

The SBP data also gave a broader view of borrowing across the economy. Loans to the private sector, which includes businesses and industries, stood at Rs9.47 trillion in May, showing a 12.64 per cent jump from last year. However, compared to April, this number dipped slightly by 0.18 per cent.  

Breaking it down, manufacturing firms borrowed Rs5.3 trillion, higher than last year but a little less than the previous month. The construction sector borrowed Rs218.94 billion, up both on a monthly and yearly basis.  

Interestingly, the agriculture, forestry and fishing sectors saw a noticeable boost. Borrowing here rose to Rs464.73 billion in May, 21 per cent more than last year and nearly 1 per cent more than the previous month.  

All in all, the numbers suggest that while businesses are being cautious, consumers seem a bit more willing to borrow, especially for cars and personal spending, hinting at growing confidence in the economy. 

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