Car Financing Takes Top Spot in Bank Loans

Prior to economic woes in the country, car financing increased by almost Rs. 70 billion in the first ten months (July-April) of the 2021-22 fiscal year. (FY2021-22)

According to a report from the State Bank of Pakistan (SBP), the general public and bank employees availed Rs. 68.95 billion loans from banks to buy cars during the said period.

The banks gave Rs. 58.7 billion loans to general consumers and Rs. 10.27 billion to their employees in car financing. After sanctions on new loans from the banks, the total car financing figure has surged to Rs. 410 billion (including Rs. 43 billion for bank employees) and Rs. 367 billion for general consumers up until April 2022.

The public has also availed loans for house-building during the said time. The bank employees have availed Rs. 98.85 billion loans for house-building during the first ten months of FY2021-22. The total loan for home construction amounts to Rs. 343 billion including Rs. 179 billion for the general consumers and Rs. 164 billion for bank employees.

The report adds that the overall banking sector loans for employees increased from Rs. 177.14 billion to Rs. 211.3 billion, which amounts to an increase of Rs. 34 billion. Consumer financing for personal reasons increased from Rs. 708 billion to Rs. 866 billion, which accounts for an increase of Rs. 158 billion during the aforementioned period.

The banks have also provided personal loans to general consumers. The total debt stock of this category has surged by almost Rs. 9.6 billion. This implies that the total figure has gone up from Rs. 235 billion to Rs. 244.6 billion.