ISLAMABAD, Feb. 16 (Xinhua) -- The State Bank of Pakistan (SBP) said that Pakistan's overall demand for loans surged during the second quarter of the Financial Year 2017-18 (FY18) and predicted the demand to stay strong during the next quarter.
Pakistani central bank released its "Bank Lending Survey" report for the first two quarters of the fiscal year 2017-18 on Thursday, which was prepared on the basis of feedback from 18 senior officers of the country's commercial banks.
The central bank noted that the number of Pakistanis having positive views about the credit conditions in the country was higher when compared with the results of its previous survey.
The State Bank pointed out that the requirement of firms for inventories and working capital besides improvement in economic conditions was the main reason behind the increased demand for loans during the under review two quarters.
It pointed out that the major impact on the improved demand for loans emanated from change in economic conditions while fixed investment, seasonal rise in credit demand and other factors also contributed to the growth.
The Pakistani central bank's survey report mentioned that the highest rise in demand was made in the corporate sector, which the SBP boded well for both employment generation and economic growth.
It said expansion in credit demand was expansive as it rose for agriculture, corporate, SME and consumers alike, adding that overall cost of borrowing rose in comparison to the last survey. It predicted an increase in overall cost of borrowing for the next quarter. The increased loans demand was in line with the recent interest hikes made by the central bank, it said.
The State Bank of Pakistan said that the overall availability of funds exhibited expansion during the last quarter and forecast it to visibly increase for the third quarter of FY18. It also stated that the declining trend that had continued since the last few quarters had rebounded for both current and expected availability of funds. The availability of funds had positively impacted bank liquidity, economic conditions and volume of deposits, it added.
