Outstanding credit rises by nearly 16% over the year

May 21, 2019 (MLN): Pakistan’s outstanding debts at the end of April 2019 stood at a heaping sum of Rs.18.93 trillion which means around Rs.1.7 trillion were cumulatively accumulated during the ten months (July 2018 – April 2019) of ongoing fiscal year (FY19). 

As compared to the same period last year, the outstanding credit is Rs.2.6 trillion higher this time around, marking an expansion of 15.8%, on a year-on-year basis.

Out of the total sum, credit to government sector accounts for Rs.11.16 trillion whereas credit to non-government sectors account for Rs.7.78 trillion. These are the two most significant sources of credit accumulation.

Credit to Government Sector:

The State Bank of Pakistan’s net credit to the government sector amounts to over Rs.6.9 trillion. A breakdown of this sum shows that the central bank accredited nearly Rs.7.6 trillion in government securities while Rs.42.2 billion were lent to the government otherwise, while on the other hand Rs.804.3 billion were retired of the central bank by means of government deposits.

The second largest source of financing for the government sector is Scheduled Banks which lent out Rs.4.3 trillion (net) as of April 2019. These banks’ investments in government securities amounts to over Rs.5.5 trillion, but they were also retired Rs.1.97 trillion under government deposit.

Credit to Non-Government Sector:

The State Bank’s participation in financing this particular sector is comparatively negligible (only Rs.25.8 billion).

But on the other hand, scheduled banks have a rather major contribution towards the sector as they have financed up to Rs.7.75 trillion, which includes Rs.1.5 trillion to PSEs, Rs.164.99 billion to NBFI’s and Rs.6 trillion to the Private Sector.

The private sector is sorted into 4 categories namely private business sector, trust funds and NPOs, Personal and others.

Among these the private business sector has taken up the largest chunk of loans, a sum of Rs.5.13 trillion. Under this category, the Manufacturing sector accounts for the largest share of credit, an amount of Rs.3.13 trillion.

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