KARACHI: Banks have disbursed Rs972.6 billion for the fiscal year 2017-18. The current year’s disbursement is 38.1 per cent higher than the last year’s disbursements of Rs704.5 billion.
Further, the agri outstanding portfolio increased to Rs469.4 billion on end June 2018 registering a growth of 15.7 per cent compared with the last year’s position of Rs405.8 billion. Similarly, the agricultural credit outreach has increased to 3.72 million farmers at end June 2018 from 3.27 million farmers last year recording growth of 13.8 per cent.
The achievement of agri credit disbursement was a challenging task in the backdrop of various real side challenges like; water shortage, low production of maize and wheat, price volatility of agri produce and a high cost of production.
However, the State Bank of Pakistan (SBP) made concerted efforts for achieving the agri credit disbursement target and implementing various budgetary initiatives set by the government. These efforts included; provision of enabling the regulatory environment for agri lending institutions, sensitising banks to adopt agri financing as a viable business proposition, exploring new avenues of financing; value chain financing, digitalization of credit, warehouse receipt financing and implementation of credit guarantee scheme for small and marginalized farmers etc.
In addition, SBP has made various initiatives for promoting agri credit, which includes allocation of regional targets, recruitment of ACOs by organizing job fairs in agri universities and continuous follow up with banks for the achievement of the targets. Further, farmer’s awareness programs at grass root level have also helped in improving agri disbursement in underserved areas.
The analysis of agri credit disbursement during the fiscal year 2017-18 reveals that five major banks collectively disbursed agri. loans of Rs523.9 billion or 101.5 per cent of their annual target of Rs516 billion which is higher by 52.9 per cent from Rs342.6 billion disbursed during last year.
Under specialized banks category, ZTBL disbursed Rs 83.2 billion or 66.6 per cent of its annual target of Rs125 billion while PPCBL disbursed Rs10.7 billion by achieving 71.5 per cent against its target of Rs15 billion during the fiscal year 2017-18.
Fifteen domestic private banks as a group achieved 92.4 per cent against the target of Rs 200 billion and five Islamic Banks achieved 82 per cent of their total target of Rs 20 billion.
Further, the performance of Microfinance Banks and Microfinance Institutions remained encouraging and collectively these institutions surpassed their annual targets by disbursing Rs 124.8 billion and 28.7 billion respectively to small farmers during FY 2017-18.