KARACHI: latest data released by the State Bank of Pakistan (SBP) showed on Saturday, Banks advances via credit cards raised by 28 per cent to Rs53 billion in April from Rs42bn in the same month a year ago,

In April 2020, auto financing was recorded at 214.5bn. The increasing growth in auto loans shows an increasing appetite for acquiring automobiles in the country as consumers are lured by lower interest rates.

During the period under review, personal loans and house building finance also saw growth.

Bankers and market analysts offered differing views on whether the banks are reluctant to offer credits card loans or if there are other reasons for this low growth.

“One of the main reasons for low volume of credit cards growth is that banks are charging of higher interest rates of 22-40 per cent,” said Samiullah Tariq, the research head of Pak Qatar Investment and Development Company.

“Automobiles are being financed at 11-12pc interest rates while personal loans are being offered at 15-20pc,” he added.

While disagreeing that banks are reluctant to offer credit cards, he said that interest rates were high and people only took the risk of getting cards if there was a dire need. Mr Tariq opined that the number of credit card holders in the country hovered between 1.5 to 2 million in the country.

Meanwhile, Shankar Talreja, a research analyst at Topline Securities, said that as of December 2020, there were 1.69m credit cards in circulation in Pakistan, up 2.9pc from 1.64m a year ago.

“Growth in credit cards is higher than total private sector loan growth of 5pc.” Mr Talreja added.