KARACHI: The banks credit to private sector has decreased by 20 per cent to Rs78 billion from July to mid of November during the current fiscal year 2015-16.
Commercial banks’ credit to the private sector, in terms of GDP, in Pakistan has witnessed a noticeable decline since financial year 2007-08, plunging from 27 per cent in fiscal year 08 to just 13 percent in 2014-15, and it continued to increase in the current financial year. The overall credit extended by the banking system in Pakistan has increased, its composition has shifted in favour of risk-free government lending. Since large government borrowings also limits the supply of loanable funds to private sector, only the blue-chip corporate gets priority in banks’ loaning decisions.
