Pakistan’s consumer financing sector demonstrated notable growth in January 2026, with automobile financing leading the charge, according to the latest data released by the State Bank of Pakistan. Car financing surged to Rs328 billion during the month, up 2.79 percent month-on-month from Rs319.08 billion in December 2025, and marking a substantial 35.76 percent increase compared with Rs241.6 billion in the same month last year. The data underscores rising demand for vehicles and the role of bank financing in supporting automotive purchases, reflecting both consumer confidence and the availability of credit facilities.
Housing finance also showed steady improvement, reaching Rs221.95 billion by the end of January 2026, up 11.02 percent year-on-year and 0.75 percent month-on-month from Rs220.31 billion in December 2025. The incremental growth in home loans indicates continued interest in residential construction and real estate investments, as financial institutions expand lending to the housing sector.
Personal loans for general use increased to Rs274.86 billion in January, representing an 8.66 percent year-on-year rise and a 2.56 percent month-on-month increase. These figures suggest sustained consumer demand for credit to meet personal and household needs, reflecting broader trends in domestic consumption and the appetite for short- to medium-term borrowing.
Overall, total credit disbursed to consumers rose 20.55 percent year-on-year to Rs1.02 trillion, up from Rs997.94 billion in the previous month, translating to a 1.99 percent month-on-month increase. This performance highlights the central role of consumer lending in Pakistan’s credit ecosystem, contributing to economic activity while enabling household expenditures across multiple sectors.
On the private sector side, outstanding loans grew 6.56 percent year-on-year to Rs10.34 trillion in January 2026. However, sequential data showed a decline of 3.09 percent month-on-month from Rs10.67 trillion in December, indicating some short-term correction in large-scale lending activity. Within private sector credit, manufacturing sector loans stood at Rs5.64 trillion, down 0.8 percent year-on-year and 3.74 percent month-on-month. Construction sector borrowing totaled Rs215.81 billion, reflecting a modest 1.54 percent year-on-year increase but a 1.61 percent month-on-month decline, demonstrating stability in project financing despite seasonal fluctuations.
Loans to agriculture, forestry, and fishing sectors rose sharply to Rs601.35 billion in January 2026, representing a 36.25 percent increase year-on-year, although down 2.68 percent month-on-month. The robust year-on-year growth indicates stronger support for agribusinesses and rural development initiatives, reflecting both government incentives and institutional lending policies aimed at sustaining agricultural production.
The overall data highlights a mixed but generally positive picture of Pakistan’s credit landscape. Consumer financing, particularly automobile and housing loans, continues to expand at a healthy pace, while private sector and agriculture lending show selective growth tempered by monthly fluctuations. Analysts note that continued access to affordable credit, coupled with targeted financial policies, will be crucial to sustaining momentum across sectors and supporting economic recovery in the months ahead.
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