KARACHI: The State Bank of Pakistan (SBP) on Wednesday said infrastructure financing by the banks and Development Finance Institutions (DFIs) has almost doubled in the last three years.
The SBP, in its quarterly Infrastructure Finance Review for Jan-Mar, 2016, said the financial institutions have now a big presence in
development lending, providing a major part of the
credit for financing infrastructure projects in the private sector
“The outstanding loans given by banks and DFIs to infrastructure borrowers (sectors) amounted to Rs444 billion at the end of the first quarter (Jan-Mar) of this calendar year against Rs225 billion owed in 2013,” the review said.
“The outstanding portfolio of banks and Development Finance Institution stood at Rs368 billion in October-December quarter of last year.”
As per the report, the institutional share in outstanding portfolio has largely been dominated by the private banks, which accounted for 62 percent of the total outstanding loans in the development finance.
State-owned banks enjoyed 31 percent share, while Islamic and foreign banks had three and one percent standing, respectively, in infrastructure lending during January-March quarter 2016.
The Development Finance Institution had three percent share in infrastructure financing.
The review found that the infrastructure financing was predominantly skewed towards the power generation sector, consuming nearly 68 percent of the total outstanding loans, other sectors like petroleum, oil and gas, and roads have recently seen a surge in financing, which was a positive sign for the development of these sectors.
“Amongst top five infrastructure sectors, banks and DFIs provided an amount of Rs301 billion in power generation finance followed by Rs55 billion to the telecom sectors during January-March 2016,” it added.
Banks and Development Finance Institutions lent Rs23.1 billion to the energy sector (oil and gas explorations), whereas Rs28.7 billion was disbursed for the construction of roads, bridges and flyovers during the first quarter of the current calendar year.
Disbursements during the quarter reached Rs20.8 billion, which is higher compared to the same period last year.
The sectors where disbursements were made during the quarter include
telecom, power generation, oil and gas, petroleum, and LPG sectors.
Non-performing loans (NPLs) continued to show a declining trend and have reached Rs12.3 billion compared to Rs16.6 billion a year earlier.
Non-performing loans as a percentage of gross outstanding decreased from 3.8 percent to 2.7 percent on quarter-on-quarter basis and from 5.3 percent to 2.7 percent year-on-year.
Courtesy : TheNews