Islamabad, Feb 19: Car financing in Pakistan saw a slight decline of Rs. 4 billion, or 2 percent year-on-year (YoY), dropping to Rs. 242 billion by the end of January 2025 from Rs. 246 billion in the same period last year. However, on a month-on-month (MoM) basis, auto financing showed a modest recovery, increasing by Rs. 7 billion (2.6 percent) compared to Rs. 235 billion in December 2024, according to data released by the State Bank of Pakistan (SBP).
Despite this uptick, overall growth in the auto financing sector remains sluggish, largely due to persistent economic challenges and cautious consumer spending. The sector had previously struggled amid high interest rates, but recent improvements in inflation and monetary easing have provided some relief.
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This was reflected in a sharp 69 percent surge in car sales in the previous month, driven by lower interest rates, improved consumer confidence, and the launch of new vehicle models. While auto financing trends remain uneven, these factors indicate a potential recovery in the market.
Meanwhile, credit card-based personal loans witnessed a significant jump, surging 28 percent YoY to Rs. 141 billion by January 2025. In contrast, housing finance declined by 3.7 percent, with outstanding loans for house building falling to Rs. 200 billion.
Overall, consumer financing in Pakistan saw an upward trend, reaching Rs. 844 billion in January 2025, marking a 3.7 percent YoY increase. While certain segments like personal loans and auto financing have shown resilience, housing finance continues to lag, reflecting shifting consumer priorities amid evolving economic conditions.
