Auto financing in Pakistan plunges by 22.2% YoY in September

October 23, 2023 (MLN): Automobile financing in Pakistan has dropped to Rs272.29 billion in September 2023, witnessing a decrease of 22.2% YoY and 2.12% MoM compared to Rs350.1bn in September 2022 and 278.05bn in August 2023, respectively, the latest data released by the central bank showed.

It is pertinent to note that automobile financing has experienced a consecutive decline for fifteen 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 Rs208.28bn by the end of September 2023, inching down by 1% YoY.

Similarly, on a monthly basis, the financing for house building remained almost flat, with a decline of 0.6% MoM.

Meanwhile, financing for personal use clocked in at Rs248.48bn, down by 1.23% YoY, while, on a monthly basis, the financing for the same category inched up by 0.10%.

Thereby, the overall credit disbursed to consumers declined to Rs839.35bn during the review month, registering a decline of 6.49% YoY and 0.7% MoM.

The outstanding credit to the private sector fell by 1.94% YoY to Rs8.21tr in September 2023.

While on a monthly basis, the outstanding credit went up by 0.8% MoM compared to August 2023.

Loans to the manufacturing sector clocked in at Rs4.42tr in the review period, down by 3.54% YoY.

The borrowing from the construction sector stood at Rs193.46bn in September 2023, down by 0.14% YoY and up 1.14% MoM compared to the previous month.

Meanwhile, loans to the agriculture, forestry, and fishing sectors rose to Rs374.788bn in the month under review, up by 14.58% YoY, and on a sequential basis, the loans to the same sector recorded an increase of 5.25% MoM.

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