Agriculture credit disbursement: banks achieve 54 percent target in eight months

Commercial and specialised banks have achieved 54 percent of agricultural credit disbursement target during the first eight months of current fiscal year 2010-11 (FY11). Year on Year (YoY) basis, the disbursement during the period increased by only 0.50 percent against the same period of last fiscal year.
Sources in banking sector told Business Recorder on Tuesday that some improvement has been witnessed in the agricultural credit disbursement after declining trend in the initial months of the current fiscal year They said that deadly floods across the country in August last year had seriously affected agricultural activities in three provinces Punjab, Sindh and Khyber Pakhtunkhawa, resulting in decline of the credit disbursement. Although, banks'' operations in most parts of the flood-affected areas have resumed, but growers'' priority is to rebuild their destroyed homes.
"In the second quarter of current fiscal, growers in the flood-hit areas were engaged in reconstruction of their houses and now they have started borrowing for agricultural purposes in the second half," sources added. The State Bank of Pakistan''s (SBP) latest statistics revealed that in absolute terms, disbursement of credit to the agriculture sector surged by Rs 725 million to Rs 145.439 billion in July-February of fiscal year 2010-2011 when compared with total disbursement of Rs 144.714 billion in the same period of last fiscal year. Although, the disbursement has posted only 0.50 percent increase, however, it is much better than the first half of current fiscal year, in which over 4 percent decline was registered.
Total disbursement during July-February of current fiscal year is some 53.87 percent of indicative target of Rs 270 billion set by the State Bank of Pakistan for FY11. Sharp decline in agri credit disbursement has been registered by Zarai Taraqiati Bank Ltd and United Bank Limited, while agricultural credit disbursement by other commercial and specialised banks, including four leading commercial banks, Punjab Provincial Co-operative Bank Limited and seven domestic private banks, has posted some increase.
Overall credit disbursement by five major commercial banks including Allied Bank Ltd (ABL), Habib Bank Ltd (HBL), MCB Bank Ltd, National Bank of Pakistan (NBP) and United Bank Ltd (UBL) has registered an increase of 28.30 percent during the first eight months of current fiscal year.
The disbursement by five major commercial banks stood at Rs 80.41 billion in July-February of 2011 compared to Rs 74.77 billion in the same period of last year, depicting an increase of Rs 5.7 billion. During the period Allied Bank Ltd performed well as it has disbursed Rs 11.33 billion (up by 12.59 percent). With this disbarment, ABL has also achieved almost 71 percent of its indicative target of Rs 16 billion for the current fiscal year.
With an increase of 11.14 percent, Habib Bank Ltd disbursed Rs 18.54 billion and achieved 61 percent its target, MCB Bank has achieved 54.70 percent target with disbursement of Rs 14.19 billion after a slight decline of 0.37 percent, National Bank of Pakistan''s disbursement stood at Rs 26.93 billion (up by 16.24 percent) and agricultural credit disbursement by United Bank Ltd declined by 11.30 percent to Rs 9.41 billion.
Agri credit disbursement by Zarai Taraqiati Bank Ltd, the largest specialised bank, has posted a decline of 25.41 percent during the period. Disbursement by ZBTL stood at Rs 31.28 billion during July-February 2011 as compared to Rs 41.93 billion in corresponding period of last fiscal year, depicting a decrease of Rs 10.65 billion. The ZBTL has achieved only 38.24 percent of its indicative target of Rs 81.8 billion.
The credit disbursement by Punjab Provincial Co-operative Bank Ltd (PPCBL) and 14 private commercial banks has surged by 21.13 percent and 20.43 percent respectively. PPCBL has achieved 61 percent of its target as its disbursement stood at Rs 4.16 billion in first eight months of the current fiscal year compared to Rs 3.44 billion in the same period of last fiscal year.
In addition, 14 domestic private banks also disbursed a combined Rs 29.57 billion in July-February of current fiscal year against disbursement of Rs 24.55 billion in same period of last fiscal year, depicting a surge of Rs 5.02 billion. While domestic private banks have achieved 60 percent target of RS 48.9 billion. It may be recalled that the State Bank of Pakistan has enhanced the agricultural credit disbursement target by Rs 10 billion and set an indicative target of Rs 270 billion for the current fiscal year 2010-2011.