Private Sector Borrowing Surges to All-Time High of Rs. 1.4 Trillion

The borrowing of the private sector from the banking system has surged to an all-time high level of Rs. 1.44 trillion in the financial year 2021-22. High interest/profit rates charged by the commercial banks have contributed to the soaring levels of borrowing.

The borrowing from the conventional banking system increased to Rs. 850 billion in FY22, up 214 percent or Rs. 580 billon year-on-year. The uptake of credit by the private sector was mainly the appetite triggered by the economic recovery in the country.

The financing from Islamic banking branches of conventional banks increased to Rs. 353 billion in FY22, up by 91 percent or Rs. 169 billion. Major sectors that received banks’ credit are textile, telecommunications, cement, leather, automobile, construction, and agri-tech.