Pakistan’s banking sector has seen a significant uptick in private sector credit, with disbursements reaching Rs589 billion from July 1, 2025, to January 16, 2026.
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This growth, though lower than the Rs1.367 trillion recorded in the same period last year, signals a rebound driven by recent government and central bank measures aimed at stimulating economic activity.
Government and SBP Initiatives
The federal government recently slashed the export refinance rate by 300 basis points to 4.5 percent, providing much-needed relief to export-oriented industries.
In parallel, the State Bank of Pakistan (SBP) held its key policy rate steady at 10.5 percent while reducing the Cash Reserve Requirement (CRR) for banks from 6 percent to 5 percent.
This CRR adjustment is designed to inject additional liquidity into the banking system, encouraging more lending to businesses. Expert Insights and Future Outlook Banker Mir Bakhtiar Ali Khan praised the CRR cut as a timely intervention that could release at least Rs300 billion for lending.
He noted that channelling even half of this to the private sector could accelerate growth in large-scale manufacturing, projected at around 6 percent this fiscal year. Babar Khan, Chairman of the Pakistan Hosiery Manufacturers and Exporters Association, welcomed the export incentives but urged further reductions in energy costs and taxes to enhance global competitiveness.
Analyst Ibrahim Amin highlighted the need to include small and medium exporters in refinance schemes, rather than favoring large players. He also advocated for integrating e-commerce startups into formal banking to boost exports. Experts believe these steps will lower borrowing costs, improve market liquidity, and foster sustainable economic expansion.
Overall, the measures reflect a commitment to supporting industrial revival and inclusive growth in Pakistan’s economy.