July 22, 2022 (MLN): Automobile financing in Pakistan has increased by 17% YoY in June 2022 to a record high at Rs367 billion, compared to Rs308bn in the same month last year, the latest data issued by SBP showed today.
On a sequential basis, auto financing remained flat in June 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.
The YoY increase in June 2022 was attributed 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 June 2022 were recorded at 23,547 units, up by 21% against the previous month led by double-digit growth in HCAR and PSMC, with the latter posting record high sales owing to aggressive pre-buying, in anticipation of price hikes and taxes along with higher demand for recently launched models.
On a yearly basis, car sales saw a two-fold increase when compared to 11,569 units sold in June 2021.
Going by the SBP data, for house building, banks’ financing stood at a record level of Rs200.7bn by the end of June 2022, a jump of 88% YoY and 7% MoM, mainly due to SBP’s measures to promote housing and construction of buildings in the country. Financing for personal use clocked in at Rs251.4bn, showing a slight growth of 2% MoM and 6% YoY.
This led the overall credit disbursed to consumers to rise to Rs900bn during June 2022, registering a growth of 25% YoY and 2% MoM.
The outstanding credit to the private sector grew by 24% YoY and 1% MoM to Rs8.06tr in June compared to Rs6.6tr in the same month last year and Rs7.97tr in May 2022.
Loans to the manufacturing sector rose to Rs4.45tr in June from Rs3.54tr in the same period a year earlier and Rs4.40tr in the previous month.
The construction sector increased borrowing to Rs188.3bn in June 2022 compared to Rs154.4bn in the same month of the last year, registering a growth of 30% YoY and 5% MoM.
Meanwhile, loans to the agriculture, forestry and fishing sector rose to Rs326.42bn in the month under review compared to Rs292.2bn in June 2021 and Rs320.5bn in May 2022, depicting a growth of 15% YoY and 1% MoM.
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