Private sector borrowing posts sharp rise of 218% in FY21

Shahnawaz AkhterWeb Editor

06th Jul, 2021. 07:22 pm
Private sector borrowing posts sharp rise of 218% in FY21

KARACHI: The private sector borrowing registered a sharp increase of 218 per cent during the fiscal year 2020/21, owing to the enhanced commercial and industrial activities in the wake of the decline in the number of coronavirus cases during the period.

According to the statistics issued by the State Bank of Pakistan (SBP) on Tuesday, the private sector borrowing from the commercial banks increased to Rs595 billion during July 1, 2020 to June 25, 2021, compared with Rs187 billion in the corresponding period of the last fiscal year.

Industry sources said the fiscal year 2019/20 adversely affected the economic activities and the coronavirus pandemic halted all commercial and industrial activities. However, with the start of the fiscal year 2020/21, the ease in lockdown and the government’s decision not to impose strict lockdowns, helped in continuation of the economic activities during the year.

The latest private sector credit off-take number is still lower, compared with the total private sector borrowing of Rs693 billion in 2018/19.

The SBP said the conventional banks extend loans worth Rs270 billion to the private sector during the fiscal year 2020/21, compared with Rs23.80 billion in the preceding fiscal year.

The share of Islamic banking in the private sector credit off-take comes out to be Rs140 billion during the fiscal year under review. Meanwhile, the Islamic banking branches of conventional banks contributed Rs184 billion in lending to the private sector.

The central bank data revealed that the federal government borrowed Rs2.95 trillion during the fiscal year under review, compared with Rs2.34 trillion in the preceding fiscal year.

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