Banks disbursed agricultural credit worth Rs704.5bn during FY2016-17

The annual agricultural credit disbursement target was 700bn

KARACHI

The commercial banks have surpassed the agricultural credit disbursement target of Rs 700 billion set by Agricultural Credit Advisory Committee (ACAC) for the fiscal year 2016-17, it was reported.

Agriculture lending banks have disbursed Rs 704.5 billion which is 17.8 per cent higher than the last year’s disbursements of Rs 598.3 billion.

Further, the agricultural outstanding portfolio increased to Rs 405.8 billion at end June 2017, registering a hefty growth of 17.4 per cent compared with the last year’s position of Rs 345.6 billion.

Similarly, the agricultural credit outreach has increased to 3.27 million farmers at end June 2017 from 2.40 million farmers last year.

The achievement of agricultural credit disbursement target was an uphill task due to high-risk perception of banks about this type of financing and the volatile prices of agricultural commodities etc.

However, SBP continued to implement its multipronged strategy for achievement of agri-credit target set by government which included: sensitising banks to adopt agriculture financing as a viable business line, exploring new financing products, value chain financing, warehouse receipts financing, digitalisation of credit, execution of credit guarantee scheme for small & marginalised farmers and inclusion of microfinance institutions/ rural support programs for catering the credit needs of marginalised farmers.

However, this achievement would not have been possible without the dynamic leadership of SBP and active support of the government.

Furthermore, the monitoring efforts included rigorous follow up with the top management of banks and agricultural credit heads and holding of regular follow-up meetings with regional management.

Conducting farmers’ awareness and financial literacy programs at grass root level were also instrumental.

The detailed credit performance reveals that five major banks collectively disbursed agricultural loans of Rs 342.0 billion or 100.6 per cent of their annual target of Rs 340.0 billion which is higher by 9.9 per cent from Rs 311.4 billion disbursed during the corresponding period last year. Amongst the five major banks, NBP has achieved 105 per cent of its annual target, MCB achieved 103.2 per cent, HBL 101.1 per cent, UBL 100.5 per cent and ABL achieved 85.4 per cent of its individual annual targets.

Under specialised banks category, ZTBL disbursed Rs 92.5 billion or 90.2 per cent of its annual target of Rs 102.5 billion while PPCBL has disbursed Rs 10.9 billion by achieving 87 per cent against its target of Rs 12.5 billion during the fiscal year 2016-17.

Fifteen domestic private banks, as a group, achieved 99.6 per cent of their target. Within this group, Soneri Bank, Bank of Punjab, Bank of Khyber, Bank Alfalah, Faysal Bank, JS Bank, Habib Metro, Summit and Silk Bank have surpassed their annual targets. However, Sindh Bank achieved 94.3 per cent, First Women Bank 90.2 per cent, Bank Al Habib 84 per cent, Askari Bank 81 per cent and Standard Chartered could achieve 73.5 per cent of their annual targets.

Ten micro finance banks, as a group, have surpassed their annual targets of Rs 60.1 billion by disbursing agricultural loans of Rs 87.8 billion or 146 per cent to small farmers during the fiscal year 2016-17.

Khushhali, NRSP Microfinance Bank, Telenor MF, First Microfinance Bank, Mobilink and U Microfinance Bank have also surpassed their targets while APNA Micro Finance achieved 96 per cent, Pak Oman 65.5 per cent and Sindh Microfinance Bank could achieve only 39.4 per cent of its annual target.

Arshad Hussain
Arshad Hussain
The author is business reporter at Pakistan Today. He can be reached at [email protected]. He tweets @ArshadH47736937

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