Need and Scope of Consumer Banking in Pakistan

Abstract

Consumer finance is a division of retail banking that deals with lending money to consumers. Consumer finance is a tool used by State Bank of Banking (SBP) to regulate the economy through potential causes of inflation, Demand–pull pressure and costpush pressure. Such as, if low cost money is put in the hands of consumers, they will pay money for to satisfy their personal desires and social needs. When consumers spend money, it propels the economy, thus economy is driven by consumer spending, that is why; the whole idea of economy is on increase spending. The real recipients of consumer finance are the people who did not have capacity to purchase expensive household items in their tight income level, but could afford them because of financing. Consumers and banks are the ultimate beneficiaries of the consumer finance and there is always a win-win situation.