Automobile financing slows down in Nov

KARACHI: Automobile financing in Pakistan saw paltry growth of 1 per cent in November compared to October 2021, data released by the State Bank of Pakistan showed.

Bank financing for cars, however, grew by 42 per cent to Rs349 billion on a year-on-year basis.

Also Read: Auto financing in Pakistan reaches record Rs338 billion in Sep

This is the “lowest monthly increase” after July 2020, Arif Habib Limited wrote in a tweet, attributing the slowdown to the amendments made by the central bank to prudential regulations regarding auto financing.

Auto financing reached at PKR 349bn as of Nov’21 (+42% YoY |+1% MoM). Lowest monthly increase after Jul’20, mainly due to the amendments made by the SBP in prudential regulation.@StateBank_Pak @Hammad_Azhar @MuzzammilAslam3 @PakWheels#SBP #Autofinancing #Pakistan #Economy #AHL pic.twitter.com/hxLjO7rOPn

— Arif Habib Limited (@ArifHabibLtd) December 20, 2021

Rising car prices and receding purchasing power of consumers are other factors behind the sluggish growth in automobile financing.

Year-round: How 2021 fared for automobile in Pakistan?

In September 2021, the State Bank of Pakistan (SBP) brought changes to prudential regulations and reduced the financing limit and period, particularly for imported vehicles to cut down on ballooning trade and current account deficits.