Private Sector borrows net amount of Rs 582 billion in 8MFY19

March 12, 2019 (MLN): During 8MFY19, non-government sector borrowed net amount of Rs 880.5 billion which is 93% higher than the net borrowed amount of Rs 455.8 billion in same period last year.

According to latest data issued by State Bank of Pakistan (SBP), net private sector credit off- take during the period under review reached to Rs 581.9 billion, up by 81%, indicating a positive development for the economy.

The  net flow of advances to private sector has continued to surge over the last few years as the last fiscal year had witnessed a record high credit off-take by the private sector at Rs775 billion. The consistent rise in lending credit to the private sector is not only a healthy indication of macroeconomic stability but it is also lucrative for the banking sector to earn interest margins from different segments of customers other than the government.

The SBP’s latest data showed that the conventional and Islamic banks’ credit to the private sector increased to Rs397.5 billion and Rs91.7 billion during Jul- Feb FY19 respectively, as compared with Rs.207.2 billion and Rs 26.6 billion credit values recorded in the corresponding period last year, showing an increase of increase of 59% and 244% respectively.

In addition to this, private sector’s advances from Islamic banking branches of conventional banks increased merely by 6% to Rs 92.5 billion.

Islamic Banks’ financing to private sector decreased to Rs 104 billion in FY18 from  Rs 139 billion in the FY17, reflecting a negative  growth of 25 percent. The financing made by Islamic banking division of commercial banks reported growth of 25 percent to reach Rs 123 billion in FY18 from Rs 97 billion in FY17.

Moreover, Credit to Public Sectors Enterprises (PSEs) reached to Rs296.7 billion in 8MFY19 against Rs 134 billion in last year, reflecting a growth of 121% whereas, credit to NBFIs for the said period recorded at Rs 1.8 billion.

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Posted on: 2019-03-12T12:06:00+05:00