Car financing soars to record high in August
Car financing by banks in Pakistan soared to an alltime high of Rs326 billion in August, as the financing became affordable for more people in the wake of low interest rates amid the COVID-19 pandemic.
The August figure for car loans depicted a 46.8% year-on-year jump, mostly owing to low interest rates, a brokerage said, quoting central bank data.
Car loans increased 3.8% month-on-month in August, while they stood at Rs314 billion in July, said Arif Habib Limited in a report.
"The growth in auto financing during Q3FY21 is mainly attributed to low interest rate environment, increasing prices of passenger cars, which affected the consumers' capacity to buy on cash, and new entrants in the automobile market that provided wider options to the consumers," The News reported the State Bank of Pakistan (SBP) as saying in its third quarterly report on Pakistan's economy for fiscal year 2021.
This was consistent with an across the board increase in the sales of auto assemblers during the period under review. In particular, cars below 1,000cc and jeeps were in higher demand, the SBP report said.
A slow down
in auto financing is expected by analysts due to the high cost of borrowing, the publication reported, adding that the central bank raised interest rates by 25 basis points to 7.25% to moderate demand growth.
Accommodative financial conditions had provided critical support to growth recovery since the start of FY2021, the Monetary Policy Committee (MPC) noted, as per the publication.
Private sector credit grew by more than 11% during fiscal year 2021 after historic cuts in the policy rate and the introduction of SBP's coronavirus-related support packages.
It grew on the back of consumer loans followed by a broad-based expansion in credit for fixed investment and finally working capital loans. "The MPC felt that some macro prudential tightening of consumer finance may also be appropriate to moderate demand growth as part of the move toward gradually normalising monetary conditions," the publication reported the committee as saying.
Meanwhile, bank lending to consumers increased near to 34% year-on-year in August. Consumer loans such as home, car and personal, and credit cards rose to Rs742 billion in August from Rs550 billion a year ago.
A Pakistani edtech startup named Maqsad has raised $2.1 million in a pre-seed funding round led by Indus Valley Capital but also participated in by Alter Global, Fatima Gobi Ventures, and several individual founders from Pakistan and the Middle East.
The startup aims to build a mobile-only platform to offer after-school academic support to "100 million" Pakistani students, says a press release by the company.
Founded by childhood friends Taha Ahmed and Rooshan Aziz, Maqsad which means purpose in Urdu - aims to deliver highquality localised academic content that is in a mix of English and Urdu.
This will be supplemented by quizzes and other gamified features that will come together to provide a personalised learning experience, the company says.
Rooshan, previously a banker at BNP Paribas in London, said: "Struggles of students during the early days of the pandemic motivated us to run a pilot. With promising initial traction and user feedback, the potential to digitise the education sector became very clear."
Maqsad says its mission is to level the playing field by offering Pakistani students the tools they need to succeed in their exams and beyond. "It's about more than just getting students to pass their exams.