Consumer Financing in Pakistan Registered Negative Growth of 6.1% in FY24

Consumer loans followed a declining path during July-March FY 2024, according to the Pakistan Economic Survey 2023-24. The survey highlighted that auto loans having a dominant share in the total portfolio historically – showed net retirements due to the continuation of stringent prudential regulations (in terms of tenor, down payment, exposure cap, etc.) and persistently high interest rates, despite relaxation in imports of inputs. During July-March FY24, loans for consumer financing witnessed a net retirement of Rs. 52.6 billion (negative growth of 6.1 percent) compared to a net retirement of Rs. 21.1 billion (negative growth of 2.3 percent) during the same period last year. Housing and construction finance declined amid a rise in the cost of production, rising domestic policy uncertainty, and a slowdown in construction activities.