Islamabad, July 20, 2025: Pakistan’s private sector lending has surged by 12% year-on-year in FY25, hitting Rs. 9.6 trillion, driven by a decline in interest rates and a revival in economic activity. This rise slightly surpasses the country’s 10-year average loan growth rate of 11%.
Despite the positive momentum, loans to the private sector still make up only 8.4% of GDP—far behind the 15.2% peak seen in FY18—indicating considerable room for expansion in coming years.
In particular, auto financing in Pakistan saw an impressive rebound with a 20% increase compared to the previous fiscal year, reflecting renewed consumer confidence and easing borrowing conditions.
Experts believe this trend will persist. A report from Topline Securities projects continued double-digit loan growth in FY26, supported by monetary easing and a more stable macroeconomic environment.
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The banking sector is also expected to benefit, as demand for business and consumer credit continues to rise, opening new avenues for financial institutions to expand their lending portfolios.
