Banks are reluctant to give agricultural credit to the farmers of Sindh, Balochistan and NWFP as lending environment in these areas has not improved, Sources in the Ministry of Food, Agriculture and Livestock (Minfal) told Business Recorder here on Saturday.
They said that the major bottlenecks in disbursing agricultural loan to farmers in these provinces are non-co-operation by the revenue departments in issuance of passbooks, issuance of bogus passbooks, lack of one-window operation by banks, law and order situation, default of farmers in Balochistan, and limited availability of passbooks especially in Sindh where about 250,000 farmers do not have the passbooks.
They said that commercial banks, like Habib Bank (HBL) and United Bank (UBL) have failed to achieve their loan disbursement targets while the big player, National Bank of Pakistan (NBP), could hardly meet the target of Rs 28 billion during last fiscal year.
Domestic private banks like Mybank, Habib Metropolitan Bank, KASB Bank, Prime Commercial Bank, Saudi Pak Bank, Bank of Khyber and Standard Chartered (Pakistan) Bank met the same fate due to absence of conducive atmosphere, in addition to limited branch network in the rural areas.
Sources said agricultural credit has not been equally distributed among the provinces, rather disparity among the provinces has increased. The share of Punjab during last six years increased from 73 percent to 84 percent, whereas the shares of Sindh and Balochistan declined from 19.59 percent to 10.25 percent and 1.51 percent to 0.25 percent, respectively.
Over last year share of Punjab has increased from 83.03 percent to 84.34 percent and share of Sindh decreased from 10.96 percent to 10.25 percent, whereas the share of Balochistan further declined by about 50 percent from 0.42 percent to 0.25 percent.
Sources said that there was some improvement in achieving credit disbursement targets in Sindh, Balochistan and NWFP after following the initiatives taken by the State Bank of Pakistan (SBP), which include issuance of guidelines for livestock and fisheries financing, development of strategy paper to increase outreach of agriculture credit, arranging banking facilities for Pakistan's largest Cattle Colony, Karachi, issuance of handbook on agri finance products of banks and publication of various documents/material in English and Urdu languages for the awareness of the farming community.
The SBP also took measures to constitute a task force on Islamic products for agri financing, develop framework on crop loan insurance in consultation with major banks and insurance companies, conduct awareness building seminar at Lahore under Asian Development Bank (ADB) project, liaise with Sindh Board of Revenue for information of district committees on Passbook issues, conduct successful 10 outreach and awareness training programmes, arrange 5 half days training programmes on agriculture finance of the officials of SBP and Minfal and revise and rationalise database for agricultural credit, they added.
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