Pakistan’s private sector credit recorded its strongest annual expansion in four years during fiscal year 2026, reflecting growing business activity and increased investment across key sectors of the economy. According to figures shared by Khurram Schehzad, Advisor to the Finance Minister, private sector credit increased by Rs1.46 trillion, representing an annual growth rate of 14.8 percent. As a result, the total outstanding private sector credit reached Rs11.38 trillion by the end of FY26, marking the fastest pace of growth since FY22.
Business financing remained the primary contributor to this expansion, with business credit rising by Rs1.18 trillion, or 14 percent, during the fiscal year. This accounted for more than 80 percent of the total increase in private sector credit, indicating stronger borrowing by businesses to support production, expansion, and commercial activities. The figures suggest that companies across multiple industries are increasing investment as economic conditions improve and financing becomes more accessible.
According to Khurram Schehzad, nearly 89 percent of the increase in private sector business credit was concentrated in three productive sectors, highlighting the areas driving Pakistan’s economic momentum. Manufacturing represented the largest share of the increase, accounting for 56 percent of additional business credit. Wholesale and retail trade followed with an 18 percent share, while agriculture contributed 15 percent. Together, these sectors absorbed the majority of new financing, demonstrating broad based demand for investment across the productive economy.
The manufacturing sector alone secured Rs657 billion in fresh financing during FY26, making it the largest recipient of business credit. Increased lending to manufacturers reflects expanding industrial activity, capacity enhancement, and investment in production capabilities. At the same time, stronger financing for wholesale and retail trade indicates rising commercial activity and improving supply chains, while increased lending to agriculture supports higher agricultural production and investment across farming operations.
Private sector credit is widely regarded as one of the most important leading indicators of economic expansion because businesses generally borrow to invest in future growth rather than simply maintaining existing operations. Companies typically use financing to expand production capacity, modernize facilities, purchase equipment, improve operational efficiency, and prepare for growing market demand. Sustained growth in business lending is therefore often viewed as an early signal of increasing economic confidence and private investment.
The broad based increase in financing across manufacturing, trade, and agriculture reflects strengthening business sentiment and an improving macroeconomic environment. The latest growth has been attributed to a combination of greater macroeconomic stability, easing financial conditions, improving investor confidence, and the impact of ongoing structural reforms. These factors have supported increased lending activity while encouraging businesses to pursue expansion and long term investment opportunities.
The composition of the latest credit growth is considered as important as its overall size. A larger share of financing is flowing into productive sectors that contribute directly to economic output, employment, competitiveness, and exports. This trend supports Pakistan’s broader objective of promoting a private sector led, investment driven, export oriented, and sustainable economic growth model. If the current momentum continues, rising private sector credit could play an important role in supporting industrial expansion, commercial development, and long term economic growth in the years ahead.
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