Auto financing remains flat at Rs367bn in May

June 21, 2022 (MLN): Automobile financing in Pakistan was recorded at Rs367 billion in May 2022, Central bank data showed.

On a sequential basis, auto financing remained flat in May 2022, mainly due to higher interest rates, an increase in car prices, regulative curbs for acquiring the loans and higher taxes on the import of automobiles and their parts.

While, compared to the same month last year, car financing volume was up by 23% from Rs297.5bn in May 2021, due to increased consumers’ appetite led by the introduction of new models and brands by new entrants, especially in the category of cars of or above 1,000cc engines and jeep (Sports Utility Vehicles/SUVs) segments which provides people with a wide variety of locally-assembled cars.

To note, the passenger car sales in May 2022 witnessed a nominal increase of 4.13% MoM to 19,395 units against 18,626 units sold in April 2022.

Going by the SBP data, for house building, banks’ financing stood at a record level of Rs188bn by the end of May 2022, a jump of 92% YoY and 5% MoM, mainly due to SBP’s measures to promote housing and construction of buildings in the country. Financing for personal use clocked in at Rs247bn and remained stable on a monthly basis while increasing by 7% YoY.

This led the overall credit disbursed to consumers to rise to Rs881bn during May 2022, registering a growth of 29% YoY and 1.7% MoM.

The outstanding credit to the private sector grew by 24% YoY and 1.5% MoM to Rs7.97 trillion in May compared to Rs6.43tr in the same month last year and Rs7.85tr in April 2022.

Loans to the manufacturing sector rose to Rs4.40tr in May from Rs3.45tr in the same period a year earlier and Rs4.38tr in the previous month.

The construction sector increased borrowing to Rs179.6bn in May 2022 compared to Rs132bn in the same month of the last year.

Meanwhile, loans to the agriculture, forestry and fishing sector rose to Rs322.25bn in the said month under review compared to Rs276bn in May 2021.

Copyright Mettis Link News