Private Sector Credit Hits Rs9.744 Trillion

Private sector credit in Pakistan exhibited robust year-on-year (YoY) growth of 15.4% in August 2025, soaring to Rs 9.744 trillion from Rs 8.441 trillion in August 2024, despite a 1.7% month-on-month (MoM) contraction, as reported by the State Bank of Pakistan (SBP).

This growth, equating to a Rs 1.303 trillion surge, was fueled by revitalized economic activity, relaxed financial conditions, and sustained cuts in government borrowing.

However, compared to the prior month, private sector credit dipped 1.7%, shedding Rs 173 billion from Rs 9.917 trillion in June 2025 to Rs 9.744 trillion in August.

The credit expansion spanned multiple segments, including working capital loans, fixed investment advances, and consumer financing, with major contributions from the textiles, telecommunications, and wholesale and retail trade sectors.

SBP data further disclosed that private sector investment in securities and shares skyrocketed 31% YoY, reaching Rs 260 billion in August 2025, up from Rs 198 billion in August 2024.

Additionally, loans to the private sector swelled by Rs 1.24 trillion, climbing to Rs 9.484 trillion in August 2025 from Rs 8.243 trillion the previous year.

The SBP remains upbeat about sustained demand for private sector credit, projecting continued vigor despite potential setbacks from a post-flood economic slowdown.

The government’s reduced net budgetary borrowing, particularly after a Rs 2.4 trillion transfer from the SBP to the national exchequer, has freed up fiscal space, enabling banks to amplify credit expansion to the non-government sector.