Credit disbursement to agriculture sector increased to Rs1.366 trillion in FY21, witnessing a growth of 12pc over FY20; however, it missed the target which was Rs1.5tr, said the State Bank of Pakistan (SBP) on Monday.
The central bank’s statement said that the number of agricultural credit borrowers witnessed a decline of 5pc, falling from 3.7 million in FY20 to 3.5m in FY21, primarily due to a pandemic-induced limited outreach.
The SBP said the disbursement is collective effort of 49 financial institutions which managed to achieve together 91pc of their assigned target of Rs1.5tr for the year.
The outstanding agricultural credit stood at Rs628 billion as on June 30, witnessing year-on-year growth of over 8pc, complementing the overall positive outlook of agriculture sector which grew at 2.77 per cent during FY21, it added. During FY21, the commercial, specialised and Islamic banks posted a better performance by disbursing Rs1.21tr against their target of Rs1.27tr, thus achieving 95pc of their assigned disbursement target.
However, microfinance banks as a group achieved 73pc of their target by disbursing agricultural loans of Rs132bn to small farmers. The microfinance institutions and rural support programmes collectively achieved 57pc of their target by disbursing Rs23bn to small and marginalised farmers.
The SBP, together with the government and the private sector, made concerted efforts for the development and commercialisation of the agricultural sector through provision of formal financial services, it added.
The proactive response by SBP to combat the threats posed by Covid-19 bolstered the economy and resulted in a rather quick rebound in economic activities across all major sectors including agriculture, said the SBP.
Besides reducing the policy rate by 625 basis points, the SBP allowed banks to offer principal deferment and restructuring of agriculture loans to help combat economic disruptions.
“As of April 2021, around 2m borrowers in the agriculture and microfinance sectors have availed the deferred principal and restructured loan option with outstanding loans amounting to Rs132bn,” said the SBP
