Pakistan’s credit landscape witnessed a notable expansion in February 2026, with automobile financing leading the charge. According to the latest data released by the State Bank of Pakistan (SBP), auto loans surged to Rs336.61 billion, marking a 2.62 percent month-on-month increase from January’s figures. More strikingly, on a year-on-year basis, car financing has skyrocketed by 35.28 percent compared to the Rs248.82 billion recorded during the same period last year. This aggressive growth in auto lending underscores a significant revival in consumer appetite and a shift in banking appetite toward the automotive sector despite the broader inflationary environment.
The surge in auto loans is part of a wider trend in consumer credit, which officially crossed the Rs1 trillion threshold this month. Overall credit disbursed to consumers reached Rs1.04 trillion, representing an annual growth of nearly 20 percent. Within this segment, house building finance also showed resilience, standing at Rs223.77 billion—a 12.08 percent increase year-on-year. Meanwhile, loans for personal use grew to Rs277.11 billion. These figures suggest that despite high borrowing costs, consumers are increasingly leaning on formal banking channels to fund major life purchases and bridge liquidity gaps.
The private sector at large also demonstrated a healthy demand for capital. Total outstanding credit to the private sector rose by 13.58 percent year-on-year to reach a staggering Rs10.61 trillion in February. On a sequential basis, these loans grew by 2.58 percent, indicating that businesses are actively seeking expansion or operational funding. The manufacturing sector remained the largest beneficiary of this credit flow, with loans totaling Rs5.86 trillion—a 9.16 percent annual increase. This influx of capital into manufacturing aligns with recent data showing an upward trajectory in large-scale industrial output across the country.
However, the credit narrative was not uniform across all industries. While the agriculture, forestry, and fishing sectors saw a massive year-on-year jump of 36.5 percent in lending—bringing the total to Rs595.47 billion—they experienced a slight month-on-month dip of nearly 1 percent. Similarly, the construction sector saw its borrowing power remain relatively stagnant, with a marginal annual increase of 1.47 percent and a slight sequential decline. This suggests a cautious approach in the real estate and infrastructure segments compared to the high-velocity growth seen in the automobile and manufacturing markets.
As the central bank continues to monitor these lending patterns, the double-digit growth in consumer and private sector credit reflects a dynamic shift in the financial ecosystem. The heavy tilt toward automobile financing, in particular, suggests that banks are finding fertile ground in asset-backed consumer lending. With total private sector credit now exceeding the Rs10 trillion mark, the focus for policymakers and financial institutions will likely shift toward ensuring that this credit growth remains sustainable without overleveraging the domestic consumer base.
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