Banks recorded a significant increase in lending to Pakistan’s private sector, with annual loans rising by 6.6% in January 2026. The total volume of private sector loans reached Rs10,342 billion, reflecting growing economic activity and improved credit demand.

The latest figures show broad-based growth across business, consumer, and auto financing segments.

According to the report, private sector loans stood at Rs10,342 billion in January 2026. This marks a notable rise compared to Rs9,706 billion recorded in January 2025.

The 6.6% annual increase highlights a steady recovery in credit flow to businesses and consumers.

Vehicle financing surges sharply

Auto financing emerged as one of the strongest-performing segments. Vehicle financing recorded a remarkable 35.8% increase on an annual basis.

The volume of car financing reached Rs328 billion in January 2026, compared to Rs242 billion in January 2025. On a monthly basis, auto financing also posted a 2.8% increase.

The continued improvement in auto loans is being attributed to relatively low interest rates, which have encouraged consumers to opt for vehicle financing.

Business, personal loans

During the same period, business loans recorded a 5.3% increase, reflecting improved borrowing activity in the corporate sector.

Personal financing also witnessed a significant rise of 16.4% in January 2026, indicating stronger consumer confidence and spending patterns.

Consumer financing overall increased by 20.5% during the period under review, according to the report.

Meanwhile, credit card usage surged by more than 30% in January 2026, signaling a sharp uptick in retail transactions and digital payment activity.

The data points to a broad-based expansion in banking sector lending, driven by lower interest rates and improving economic conditions.