Businesses repaying bank debt amid weak investment

Businesses in Pakistan repaid a net Rs91.8 billion in bank debt during the first 100 days of FY27, from July 1 to October 9, according to State Bank of Pakistan data reported by Dawn. The net repayment was higher than the Rs31.7 billion recorded over the same period in FY26, pointing to continued weakness in private-sector borrowing and investment. In FY26, businesses had borrowed Rs1.46 trillion over the full year.

Islamic banking branches of conventional banks were the exception, extending Rs138.6 billion in net loans, compared with Rs63.4 billion a year earlier. Islamic banks, by contrast, repaid a net Rs107.8 billion, while conventional banks recorded net repayments of Rs122.6 billion. Dawn cited weaker purchasing power, uncertainty and pressure on export markets as concerns for businesses, while the article also noted that regional conflict had raised oil prices and added uncertainty. The government has struggled to lift growth above 3.5 to 3.7 per cent for the past three years.