Despite 80% fall in car sales, banks gave Rs326 billion for car financing in Feb-2023
ISLAMABAD: Despite a massive 80 per cent decline in the sales of automobiles in Pakistan in the month of Feb-2023, banks gave Rs 326 billion for car financing last month.
In the month of Jan-2023, domestic banks gave loans for automobiles worth Rs 332 billion, showing a marginal decline in loans.
In Feb 2023, banks financing for automobile also fell slightly, to Rs326 billion as compared to Rs 356 billion financing in Feb 2022.
In percentage, automobile financing fell 8.64% YoY and 1.84% MoM as compared to Rs356.7bn in February 2022. The State Bank of Pakistan released this latest data on Monday, according to the Mettis Global.
The slight decrease is attributed to higher interest rates, an increase in car prices, regulative curbs for acquiring loans, and higher taxes on the import of automobiles and their parts.
However, in comparison with 80 per cent decrease in the sale of automobiles in Feb-2023, decline in car financing is the negligible.
Last month, car sales recorded a massive decrease of 80% YoY, clocking in at 3,642 units, whereas, 18,054 units were sold February 2022. The Pakistan Automotive Manufacturers Association (PAMA) revealed this in its data released last week.
Going by the SBP data, consumer financing for house building stood at Rs214.8bn by the end of January 2023, a jump of 35% YoY mainly due to SBP’s measures to promote housing and construction of buildings in the country.
However, on monthly basis, the financing for house building remained almost flat.
Meanwhile, according to the Mettis Global report, financing for personal use clocked in at Rs254.25bn, up by 5.88% YoY while on monthly basis, the financing for the same category remained relatively unchanged.
This led the overall credit disbursed to consumers to rise to Rs889bn during February 2023, registering a growth of 7.1% YoY while on monthly basis, it remained almost stable.
The outstanding credit to the private sector grew by 11.12% YoY and 2.38% MoM to Rs8.6 trillion in Feb 2023 compared to Rs7.73 trillion in Feb 2022 and Rs8.4 trillion in January 2023.
Loans to the manufacturing sector surged by 13.47% YoY to Rs4.8 trillion in the review period while on monthly basis, the loans to the same sector remained unchanged.
The borrowing from the construction sector increased to Rs193bn in February 2023, registering a growth of 15.55% YoY compared to Rs167bn in the same month of the last year.
Meanwhile, loans to the agriculture, forestry, and fishing sector rose to Rs342.8bn in the month under review, up by 11.08% YoY from Rs308.06bn in February 2022 while on a sequential basis, the loans to the same sector remained relatively flat.
