KARACHI: Banks lending to the private sector has sharply declined by 44 percent during first nine months (July – March) 2019/2020 due to slow economic activities and outbreak of coronavirus, according to data released by State Bank of Pakistan (SBP) on Monday.
The private sector lending fell to Rs322 billion during July 01, 2019 – April 03, 2020 as compared with Rs577.37 billion during July 01 – April 05, 2019.
Analysts said that the due to higher interest rate prevailed for the period discouraged the private sector to take loans for establishment new businesses or expansion.
The analysts further said that lockdown after the outbreak of coronavirus (COVID-19) in Pakistan in the month of February 2020 further hampered the business activities.
The data showed that conventional banks had extended private sector loans to the tune of Rs134.79 billion during first nine months of current fiscal year as compared with Rs396.58 billion in the corresponding months of the last fiscal year.
The private sector credit off-take from Islamic banks also fell to Rs67.93 billion during the period under review as compared with Rs78.69 billion in the same period of the last fiscal year.
The loans disbursed to private sector by Islamic Banking Branches of Conventional Banks witnessed increase to Rs119.2 billion during July – March 2019/2020 as compared with Rs102 billion in the same period of the last fiscal year.