Banks and financial institutions have extended over Rs 155 billion fresh agricultural loans to farmers for production and development purpose across the country in first quarter of on-going fiscal year (FY18). According to State Bank of Pakistan (SBP) with multifaceted strategy and joint efforts, agricultural credit disbursements has posted a sufficient growth of 50 percent during the July-Sep of FY18, when compared to same period of last fiscal year (FY17). Overall, banks have disbursed agricultural credit of Rs 155.86 billion in first quarter of this fiscal year compared to Rs 103.858 billion in same period of last fiscal year, depicting an increase of Rs 52 billion.
The detailed analysis revealed that agricultural credit disbursements have posted surge in both categories ie development and production. With an increase of 51 percent, some Rs 10.574 billion were disbursed for development purpose and Rs 145.287 billion, up 50 percent, for production in July-Sep of FY18. After surpassing Rs 700 billion agricultural credit disbursements in FY17, the State Bank has already set an agricultural indicative credit target of Rs 1.001 trillion for FY18 and accordingly targets were assigned to participatory institutions including commercial banks, Islamic Banks, Private Banks, Microfinance Banks, Microfinance Institutions and National Rural Support Programs. The disbursements during first three initial months of this fiscal year are some 15.57 percent of annual target.
Amongst the five commercial banks, Allied Bank Limited has achieved 20 percent of its annual target and disbursed Rs 11.27 billion; Habib Bank Limited 15.45 percent with Rs 20.861 billion disbursements and MCB Bank has achieved 25.56 percent of its annual target and disbursed Rs 20.706 billion in first quarter of this fiscal year. National Bank of Pakistan (NBP) achieved 8 percent target and extended agricultural loans worth Rs 14 billion, while with Rs 9.11 billion disbursements United Bank Limited achieved 14 percent of its individual annual target.
Under the specialized banks category, Zaree Tarqiati Bank Limited disbursed Rs 12.40 billion, up 45 percent or 10 percent against its target of Rs 125 billion, while PPCBL disbursed Rs 1.68 billion, which is 11 percent of its target of Rs 15 billion during the period under review. Fourteen domestic private banks have achieved 20 percent of annual target of Rs 200 billion. Among domestic private banks Askari Bank Limited disbursed Rs 1.75 billion, Bank Al-Habib Limited Rs 7.55 billion, Bank Al-Falah Limited Rs 5.5 billion, Summit Bank Rs 2.44 billion, Faysal Bank Rs 7.57 billion, JS Bank Rs 1.03 billion, Soneri Bank Rs 4.2 billion, The Bank of Khyber Rs 1.6 billion, The Bank of Punjab Rs 3.94 billion and Standard Chartered Bank Rs 3.55 billion in the first quarter of this fiscal year.
Under microfinance category, eleven microfinance banks as one group have disbursed Rs 18 billion and achieved 18 percent of their annual target of Rs 100 billion while under Islamic mode of financing, five Islamic banks collectively disbursed Rs 2.33 billion against targets of Rs 20 billion to agricultural borrowers. Bankers said that with inclusion of 15 Micro Finance Institutions and Rural Support Programs in the SBP's agricultural indicative credit target scheme, it is being expected that outreach of agricultural loan will increase in rural areas. During the last fiscal year, they collectively provided credit to more than 0.55 million farmers, while during the first quarter of this fiscal year, collective disbursements of Micro Finance Institutions and Rural Support Programs have surged to Rs 5 billion.
It may be mentioned here that the overall agriculture sector rebounded strongly, as it registered a growth of 3.5 percent in FY17 compared to a nominal increase of 0.3 percent in the previous year and to achieve higher GDP growth government is focusing on agricultural sector.