KARACHI, Feb 26: No considerable large-scale borrowing has been made for expansion of any industry or initiating new projects during the current month amid uncertain political situation even after the national elections, bankers told Dawn on Tuesday.

“We were expecting that after polls things will come to normal but the industrialists and other big corporate borrowers are still reluctant to take initiatives,” said a senior official at a large private bank.

Other bankers said that the credit growth had significantly declined since the imposition of emergency on November 3, 2007.

However, the State Bank latest data showed that credit growth since November was higher than last year. Credit to private sector from July 2007 to February 9, 2008 was Rs263 billion compared to Rs227 billion during the same period last year.

“The higher credit growth since November 2007 compared to last year was because of heavy payment made to oil companies,” said a research analyst.

“I believe that the corporate borrowers will remain cautious at least for a month till the formation of new government,” said a senior banker.

Mohammad Imran, Research Head at First Capital Equity, said the slow credit off-take would certainly hit the economic growth which could be felt till the end of the current fiscal year.

Analysts said the government had already curtailed the developmental expenditures as its spending had already touched record high.

Bankers said the credit growth for consumers had increased significantly high this year and it would translate into higher interest income for banks.

“I expect little impact of slower credit growth on interest income of the banks,” said Mr Imran. “Banks have boosted consumer credit at the highest interest rate”.

The SBP in its latest monetary policy had jacked up its lending rate by 0.5 per cent.