Loan demand rebounds sharply in Q4FY26

According to Mettis Global, loan demand in Pakistan rose sharply during the fourth quarter of FY26, with the State Bank of Pakistan's Bank Lending Survey placing the current demand index at 79, up from 72 in the third quarter. The index moved back into the zone that denotes a considerable increase. The survey, run by the SBP during July 1 to 31, 2026, covered 38 banks, down from 44 in the previous round.

Expectations for future borrowing also strengthened, with the forward-looking index reaching 87 from 74 in Q3-FY26. Demand from inventory and working capital needs rose to 70, while fixed investment needs improved to 59. Sector-wise, agriculture, corporate and consumer lending all gained on a quarterly basis, whereas SME demand slipped to 70 from 77.

Year-on-year, every sector recorded a lower reading, though the current borrowing cost index rose to 59 from 47 while expected costs eased to 58. Fund availability also strengthened, with the current index at 74 and deposit volumes posting the strongest growth, reaching 81. Non-performing loans edged down to 47 from 49.