Agriculture sector has 4.9 percent share in bank loans

Agriculture sector gets only 4.9 percent share of total loans from the banks, whereas corporate sector is gaining 63.5 percent, bank's staff 2.3 percent, consumer financing attains 8 percent and small and medium enterprises gets 9.9 percent.
It was a crux of a seminar titled 'Policy, adequacy and awareness about agricultural financing' arranged by the Agriculture Credit and Micro-financing Department, State Bank of Pakistan in collaboration with Agri-Economics Department, University of Agriculture Faisalabad at New Senate Hall, UAF.
The session was chaired by UAF Faculty of Agriculture Dean Professor Dr Muhammad Ashfaq, while Syed Samar Husnain, Director, Agriculture Credit and Micro-financing Department, State Bank of Pakistan was the guest of honour. Samar Husnain said that only 11 percent people across the country could get loans from the banks, while the 89 percent fails to do so. He said that all banks are bound to operate 20 percent branches in rural areas to facilitate the rural people.
Talking about the international work force, he said that 36.5 percent international workforce belongs to agriculture industry, whereas agriculture is contributing 5.7 percent share in the GDP of the world. He said that in the economy of South Asia, as many as 27 percent in the Gross Domestic Product is contributed by the agriculture while in the said region 63 percent of labour force is associated with agriculture.
He said the small holders had been given 28 percent of loans in 70s and now the banks are giving 70 percent of loans to them. He said an agriculture officer was used to deal with more than 10,000 applications for the loans because of heavy workload. Dean Dr Ashfaq said that 90 percent of the farming community is holding land uneconomical and 20 percent seed requirement is being fulfilled by public sector seed companies while 80 percent of the requirement is being met by private sector.
Farooq Abid Tung, Country head, Askari Bank urged the people to invest more in the field of agriculture that is backbone of our economy. He said that the agriculture has become more profitable business in the current circumstances. He called for adopting latest techniques as 40 percent of milk wastes in our country. Professor Dr Iqbal Zafar, Dean, Faculty of Agri-Economics and Rural Sociology stressed the need for developing strong advisory mechanism for the small farmers to facilitate them.
Agri-Economics Department, Chairman Dr Ashfaq briefed the audience about the distribution of loan amount get by the farmers. He said they used only 37 percent of the loan on agriculture while 27 percent of the loan is used by the farmers for the construction, renovation and repairing of the houses. Giving more details, he said that 23.4 percent of the loan is used by the farmers on the marriages of son/daughter, 6.7 percent on the purchase of electronics including TV, fridge and 3.3 percent to pay the loans and 3.3 percent for domestic needs. Kashif Umar Thanvi, Habib Bank Ltd Director also spoke on the occasion. Dr Sumer Hussnain, Director, Agricultural Credit Department, SBP and Syed Sajjad Ali Shah, Chief Manager SBP also addressing on the occasion> They explained the SBP policy about the Agri Credit.