KARACHI - For the first time, the private sector credit off-take from the schedule banks showed negative growth in the current financial year amid slowdown in the domestic economic activity, surge in Non Performing Loans (NPLs) and availability of alternate avenues to extend credit, such as government and Public Sector Enterprises (PSEs), allowed the banks to be risked averse towards disbursing corporate sectors credit. The domestic banks lending to private sector showed negative growth of Rs3.274b from July 01 to June 13, 2009 as against net credit of Rs383.5b in last fiscal, according to SBP monetary statistics. Acute power shortages, decline in external demand due to the global recession and SBPs tight monetary policy stance necessary for overall macroeconomic stability are responsible for the fall in demand for credit by the private sector. Negative wealth effect transmitted through a fall in asset prices also played its part in this decline. However, credit to public sectors enterprises (PSEs) has seen a significant increase of Rs83b, depicting a massive growth of 57.63pc during Jul-June FY09. The credit expansion by the banks to the PSEs surged to Rs144.5b in 343 days of outgoing fiscal as against Rs61b during the corresponding period of last year.