Supporting agriculture: Credit disbursement to farmers rises 32%

Banks lend Rs54.3b in first two months of current fiscal year.

KARACHI:

Banks have disbursed Rs54.3 billion in agricultural credit in the first two months of the current fiscal year, up 32% from the disbursement of Rs41.1 billion in the corresponding period of previous year.

They have achieved 11% of their annual indicative target of Rs500 billion so far. The outstanding portfolio of agricultural loans increased Rs34 billion from Rs261.6 billion to Rs295.6 billion at the end August.

The State Bank of Pakistan (SBP) has set the agricultural credit disbursement target at Rs500 billion for banks in the current fiscal year, which is 31.5% higher than last year’s target of Rs380 billion. It is also 28% higher than the actual disbursement of Rs391.4 billion in 2013-14.

Of the total target this fiscal year, Rs252.5 billion has been allocated to five major banks, Rs90 billion to Zarai Taraqiati Bank (ZTBL), Rs115.5 billion to 15 domestic private banks, Rs11.5 billion to Punjab Provincial Cooperative Bank (PPCBL), Rs28.2 billion to seven microfinance banks and Rs2.3 billion to four Islamic banks.

Among major banks, Habib Bank has achieved 16% of its annual target, National Bank has achieved 11.6% and United Bank and MCB Bank have reached 11.4% and 9.4% of their targets, respectively. Allied Bank could achieve only 4.1% of its annual target.

Under the specialised banks’ category, ZTBL disbursed Rs4.4 billion, or 5% of its target of Rs90 billion, during July-August while PPCBL could disburse only Rs647.1 million, which is 5.6% of its target of Rs11.5 billion.

Of the 15 domestic private banks, Standard Chartered Bank achieved 40% of its annual target followed by Summit Bank (38.5%), Silkbank (26.8%), NIB Bank (22%), Faysal Bank (21%), Bank Alfalah (18.6%) and Bank Al Habib (14.6%).

Published in The Express Tribune, September 26^th, 2014.

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