November 26, 2024 (MLN): Automobile financing in Pakistan has increased to Rs235.88bn in October 2024, witnessing a rise of 3.67% MoM compared to Rs227.54bn recorded in September 2024, according to the latest data released by the central bank.

Last month, car financing snapped its 26-month-long decline with a modest 0.11% increase.

This positive trend is attributed to banks' increased lending to the private sector as they strive to meet the 50% Advances-to-Deposits Ratio (ADR) requirement to avoid incremental taxation.

As of now, the figure for auto-financing stands at the highest since May 2024. Moreover, this marks the highest monthly percentage increase since September 2021.

On a year-on-year basis, car financing is still down by 10.66%, as in the same period last year, the figure for financing was reported at Rs264.03bn.

This decline 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 data provided by the State Bank of Pakistan (SBP), consumer financing for house building stood at Rs201.46bn by the end of October 2024, down by 2.64% YoY.

Month-wise, the financing for house building has decreased by 0.17% compared to Rs201.8bn incurred in the previous month.

Meanwhile, financing for personal use clocked in at Rs281.69bn, up by 14.42% YoY and 17.05% MoM.

Thereby, the overall credit disbursed to consumers registered a rise of 3.84% YoY to clock in at Rs861.02bn. Compared to the credit of Rs809.25bn in the previous month, consumer financing has recorded a 6.4% MoM rise.

The data released by the central bank further showed that outstanding credit to the private sector rose 15.21% YoY to Rs9.33tr in October 2024.

On a sequential basis, private sector loans reported a rise of 10.93% MoM compared to the credit of Rs8.41tr in September.

Under the credit to the private sector, the loans to the manufacturing sector clocked in at Rs5.33tr in the review period, up by 18.14% YoY and 12.96% MoM.

The borrowing from the construction sector stood at Rs201.25bn in October, up by 3.4% YoY while down 2.06% MoM.

Going forward, the data further shows that loans to the agriculture, forestry, and fishing sectors rose to Rs409.41bn in the month under review, up by 6.75% YoY, and on a sequential basis, the loans to the same sector recorded growth of 3.06% MoM.

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Posted on: 2024-11-26T18:49:19+05:00