Automobile financing in Pakistan dropped to PKR 234.64 billion in November 2024, marking a 0.53% month-on-month decline from PKR 235.88 billion recorded in October 2024, according to data released by the State Bank of Pakistan (SBP). On a year-on-year basis, the decline is more pronounced, with financing decreasing by 8.72% compared to PKR 257.05 billion in November 2023.
The fall in automobile financing is primarily attributed to several factors, including elevated interest rates, higher car prices, stringent loan regulations, and increased taxes on the import of vehicles and their parts. These challenges have discouraged consumer demand and financing activity in the auto sector, reflecting broader economic pressures.
Conversely, other segments of consumer financing exhibited varying trends. Financing for house building stood at PKR 200.21 billion by the end of November 2024, showing a year-on-year decline of 3.24%. Month-on-month, it dropped by 0.62% from PKR 201.46 billion recorded in October.
Meanwhile, personal financing recorded significant growth, rising by 16.68% year-on-year to PKR 287.01 billion. On a monthly basis, this category witnessed an increase of 1.89%, reflecting consumer preferences for more flexible borrowing options.
The overall consumer credit disbursed rose by 4.99% year-on-year, reaching PKR 866.02 billion in November 2024, compared to PKR 861.02 billion in the preceding month, representing a month-on-month rise of 0.58%.
In terms of private sector credit, outstanding loans saw robust growth, climbing 20.84% year-on-year to PKR 9.9 trillion in November 2024. Sequentially, loans to the private sector also increased by 6.07% from PKR 9.33 trillion in October.
The manufacturing sector remained a key driver, with loans amounting to PKR 5.75 trillion in November, reflecting an increase of 25.53% year-on-year and 8.05% month-on-month. Borrowing in the construction sector also showed growth, rising by 4.66% year-on-year and 0.8% month-on-month to PKR 202.87 billion.
Agriculture, forestry, and fishing sectors recorded loans totalling PKR 434.77 billion in November, up by 10.52% year-on-year and 6.19% month-on-month.
The numbers come after a high interest rate. Moving forward, a reduction in the benchmark interest rate may suggest an improvement in borrowing in the months to come.
