We found a match
Your institution may have rights to this item. Sign in to continue.
- Title
Exploring the Determinants of Private Sector Credit in Pakistan: A Sectoral Analysis.
- Authors
KAMAL, JUNAID; HUSSAIN, SAYED IRSHAD
- Abstract
This study empirically explores the existence of any cross-sector differences in bank lending behaviour in Pakistan. A wider set of both demand- and supply-side variables are included, and the ARDL model is employed to estimate the results. The empirical findings confirm that significant cross-sector differences regarding the impact of different variables on private sector credit exist in the short run. Moreover, in the long run, the impact of various factors on credit to the private sector are the same across sectors. While domestic deposits positively influence credit, non-performing loans have a negative effect on credit. Interest rate has no significant effect on credit in either the short or long term. Lastly, government borrowing from commercial banks crowds out the private sector. The findings point towards a weaker transmission of monetary policy through the credit channel and support the idea that the availability of funds is more important for private sector credit penetration in a country such as Pakistan with limited resources, whereby effective policy measures are needed to stimulate savings in the economy.
- Subjects
PAKISTAN; PRIVATE sector; INTEREST rates; BANK loans; NONPERFORMING loans; DEPOSIT insurance; MONETARY policy; CREDIT control
- Publication
Forum Scientiae Oeconomia, 2023, Vol 11, Issue 2, p147
- ISSN
2300-5947
- Publication type
Article
- DOI
10.23762/FSO_VOL11_NO2_7