Banks provide Rs317 billion for car financing in march 2023 despite economic crisis, record high markup rates
ISLAMABAD: The banks have provided 317 billion rupees for automobile financing in the month of March this year Despite the ongoing economic crisis and record high markup rates. It shows that car financing is still a big demand in Pakistan.
However, in comparison with March 2022, auto financing dropped by 12.83 percent. In March last year, Pakistani banks provided Rs363.55 billion for automobile financing. The month-on-month decline in automobile financing is 2.74 percent down in March 2023 when compared with financing in Feb 2023.
The marginal decline in financing for automobiles in March is being attributed to higher interest rates, increase in car prices, regulative curbs, and higher taxes on the import of automobiles.
Importantly, in March, the car sales witnessed a massive decline of around 68.41% YoY, clocking in at 7,201 units compared to 22,799 units recorded in the same month last fiscal year.
The Pakistan Automotive Manufacturers Association (PAMA) has revealed this in its latest data issued on Thursday.
Moreover, house financing amounted to Rs215 billion by the end of March 2023. It shows an increase of 26.23% YoY mainly due to SBP’s measures to promote housing and construction of buildings in the country.
Meanwhile, financing for personal use clocked in at Rs251.18bn, up by 4.12% YoY while on a monthly basis, the financing for the same category remained relatively unchanged.
This led the overall credit disbursed to consumers to rise to Rs879bn during the review month, registering a meager growth of 3.23% YoY while on a monthly basis, it remained almost stable.
The outstanding credit to the private sector grew by 6.7% YoY to Rs8.52tr in March 2023.
Loans to the manufacturing sector surged by 9.02% YoY to Rs4.72tr in the review period while on a monthly basis, the loans to the same sector dropped by 1.5% MoM.
Also, the construction sector’s borrowings increased to Rs195.58 billion in March 2023, showing 5.5 percent increase YoY and 1.44% MoM.