KARACHI: With 27.5 percent growth, the agriculture lending financial institutions have disbursed Rs 1.222 trillion on account of agricultural financing during the first nine months (July-March) of this fiscal year.

According to Economic Survey of Pakistan released Thursday, the State Bank of Pakistan (SBP) allocated the indicative agricultural credit disbursement target of Rs 1.819 trillion for FY23, which is 28.2 percent higher than last year’s disbursement of Rs 1.419 trillion.

During FY2023 (July-March), the agriculture lending financial institutions have disbursed Rs 1.222 trillion, which is 67.2 percent of the overall annual target and 27.5 percent higher than Rs 958.3 billion disbursed during the same period last year.

SBP increases indicative credit limits for agri financing

Further, the outstanding portfolio of agricultural loans has increased by Rs 80.2 billion and reached Rs 712.9 billion at end March 2023 compared to Rs 632.7 billion at end March 2022, witnessing 12.7 percent growth. In terms of outreach, the number of outstanding borrowers has reached 3.04 million in March 2023.

Analysis of the sector-wise disbursement reveals that out of the total disbursement of Rs 1.222 trillion, the farm sector has received Rs 625.1 billion (51.2 percent) and Rs 596.8 billion (49 percent) has been disbursed to non-farm sector during July March FY2023.

However, the data of farm credit by land holdings reveals that Rs 234.4 billion has been disbursed to the subsistence farm size which witnessed 37.5 percent growth during the period. Moreover, Rs 83.1 billion has been disbursed to economic farm size and Rs 307.7 billion to above economic farm size witnessing a growth of 29.7 percent.

Under non-farm sector, agriculture lending institutions disbursed Rs 170.3 billion to small farms with positive growth mainly due to credit off take in non-farm sector activities, especially in livestock/dairy and meat sector. Moreover, Rs 426.6 billion has been disbursed to large farms showing a growth of 19.8 percent during July-March FY2023.

In terms of sectoral and purpose-wise performance of agriculture credit, the production loans of farm sector increased by 35.3 percent, whereas development loans declined by 13.8 percent during July-March FY2023. Further, under non-farm sector, the livestock/dairy and meat sector witnessed 20.2 percent growth and poultry sector recorded 25.5 percent growth during the period under review.

Currently, 46 formal financial institutions are providing agriculture loans to the farming community, which include 5 major commercial banks, 13 medium sized domestic private banks, 6 Islamic banks, 02 specialized banks (ZTBL & PPCBL) and 11 microfinance banks besides 9 Microfinance Institutions/Rural Support Programmes (MFIs/RSPs).

Copyright Business Recorder, 2023