Private Sector Lending Increased due to Low Mark-up Loans


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The private sector in Pakistan has seen the number of new businesses grow thanks to an increase in the low-rate loans. The credit given to the private sector from the banks rose to Rs. 235 billion during the last six month of 2017 seeing the banking industry credit value soar by Rs. 115 billion according to the State Bank of Pakistan.


Low interest rates and a balanced policy along with a rise in the number of businesses saw the loan portfolios of many major banks increase by a considerable amount. The private sector saw an increase in the credit it received which was above Rs. 100 billion while the same period saw an increase of credit uptake. It is believed, that lending to the private sector will grow further during the last six months of the financial year in industries such as trading, manufacturing and service.


GDP has grown in recent years due to support from the output from a number of different industries, while it is expected that GDP will grow by 6%, falling in line with a prediction made by the Central Bank. The value of loans made to the private sector by conventional banks rose to Rs. 182 billion up to December with the Islamic Banks following behind with Rs. 26.5 billion highlighting just how much money is being offered to the private sector.