Rising interest rate to hit consumer loans
ISLAMABAD: President Askari Commercial Bank Kalim-ur-Rehman Thursday said the rising interest rates would negatively affect on consumer financing and the demand for fresh loans is not likely to continue unlike it has done in the recent past.
He, however, said that there is still huge untapped market for such loans. Addressing a seminar on “Investment Opportunities in Pakistan” he said that almost all banks have made a remarkable progress in the introduction of IT applications, now the essential IT related facilities are available in Pakistan, which can be compared with such facilities in banks in the developed world.
Perhaps the only important thing missing is the inter-bank electronic transfer of funds, but work is going on to introduce this facility within this fiscal year, he said.
He said that another area where there has been commendable progress over the last five years or so is in the introduction of consumer banking in Pakistan.
Speaking on ‘modern trends in banking sector’ he said putting additional purchasing power in the hands of the common man has led to a tremendous increase in the demand for consumer durables. As a result, production of home appliances and auto vehicles is now about 3 times of what is was 3 years ago.
At the same time, mortgage financing has become an important business for banks and the current revival of the construction industry owes much to this type of financing by the banks.
Agriculture sector requires about Rs. 300 billion of financing in a year but only about Rs. 40 billion were provided until some years back. —Staff Report