Car financing increased by Rs. 8 billion by the end of October to Rs. 236 billion compared to Rs. 228 billion in the previous month, data revealed by the State Bank of Pakistan (SBP).
However, auto financing decreased by Rs. 28 billion or 10.7 percent compared to Rs. 264 billion in October 2023.
The overall growth in the sector remains stunted despite some improvement in consumer inflation seen this fiscal year. The cost of cars is still a massive barrier to sales.
Meanwhile, personal loans on credit cards surged by 27 percent YoY to Rs. 134 billion by October 2024.
Consumer financing for house building declined by 2.6 percent to Rs. 201 billion during the period in review.
Overall credit issued to end-users (consumer financing) improved to Rs. 861 billion in October 2024, a 3.8 percent YoY decrease.
That’s bcz cars are beyond expensive. No one can buy a 3 million rs car on a 60000 rs salary
Banks reluctance an unnecessary lengthy and complex process is the key problem. If banks themselves offer house loans to good and regular account holders they will see a massive increase in organic growth.
Banks in Pakistan are extremely greedy. The interest rates are insane. Banls in west charge usually anywhere from 1.5 to 3% on mortgages and other loans now the interest rate went to 5 or 6% for mortgages ppl stopped buying homes. Here i saw an advertisement for 17 to 14% interest available for cars. I thought it was a joke but bamks were proudly advertising these outrageous rates
Your comment suggests that you don’t have much information about banking or economics. There is a policy rate which is loosely correlated with inflation. This policy rate is announced by SBP. Banks are required to pay interest to depositors at little less than the policy rate and provide loans to consumers at little above the policy rate. Google and AI tools are free nowadays so one has to learn before using a strong word like ‘greedy’.