Auto financing drops by 21.13% YoY to Rs278bn in August 2023

September 18, 2023 (MLN): Automobile financing in Pakistan has dropped to Rs278.05 billion in August 2023, witnessing a decrease of 21.13% YoY and 2.50% MoM as compared to Rs352.54bn in August 2022 and Rs285.19bn in July 2023, respectively, the data issued by the central bank revealed on Monday.

It is pertinent to note that automobile financing has experienced a consecutive decline for 14 months.

This decrease is mainly attributed to higher interest rates, an increase in car prices, regulative curbs for acquiring loans, and higher taxes on the import of automobiles and their parts.

Going by the SBP data, consumer financing for house building stood at Rs209.49bn by the end of August 2023, a jump of 1.7% YoY mainly due to SBP’s measures to promote housing and construction of buildings in the country.

However, on a monthly basis, the financing for house building remained almost flat, with a decline of 0.77% MoM.

Meanwhile, financing for personal use clocked in at Rs248.22bn, down by 1.01% YoY, Similarly, on a monthly basis, the financing for the same category went down by 0.81%.

This led the overall credit disbursed to consumers to rise to Rs845.53bn during the review month, registering a decline of 5.36% YoY and 0.67% MoM.

The outstanding credit to the private sector fell by 1.31% YoY and 0.61% MoM to Rs8.14tr in August 2023.

Loans to the manufacturing sector clocked in at Rs4.40tr in the review period, down by 1.79% MoM.

The borrowing from the construction sector stood at Rs191.28bn in August 2023, increasing by 1.35% YoY and 0.55% MoM.

Meanwhile, loans to the agriculture, forestry, and fishing sectors rose to Rs356.06bn in the month under review, up by 9.9% YoY, and on a sequential basis, the loans to the same sector recorded an increase of 2.86% MoM.

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