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KARACHI: Banks have achieved 64 percent of the annual target of agriculture lending by disbursing some Rs953.7 billion during the July-March FY21.

According to Pakistan Economic Survey issued by the federal government on Thursday, following the government’s agenda for promoting agriculture sector, the State Bank of Pakistan (SBP) assigned an indicative agriculture credit disbursement target of Rs1,500 billion for FY2021, 23.5 percent higher than last year’s disbursement of Rs1,215 billion.

However, the agricultural credit data showed that growth of agricultural credit disbursement is very low due to Covid-19 pandemic. According to Economic Survey, despite the pandemic, agriculture credit disbursement is encouraging and overall, the agriculture lending institutions have disbursed Rs953.7 billion during July-March FY21. The disbursed amount is 63.6 percent of the annual target and 4.6 percent higher than the disbursement of Rs912.2 billion during the same period last year.

The outstanding portfolio of agriculture loans has increased by Rs29.7 billion i.e., from Rs572.1 billion to Rs601.8 billion or 5.2 percent at end March 2021 as compared to same period last year. In terms of outreach, the number of outstanding borrowers has reached 3.5 million in March 2021.

Sector-wise analysis of disbursement reveals that out of the total disbursement of Rs953.7 billion, the farm sector has received Rs507.9 billion (53.3 percent) while Rs445.8 billion (46.7 percent) has been disbursed to non-farm sector during FY2021(July-March).

The agricultural data of farm credit by land holdings reveals that Rs150 billion has been disbursed to subsistence farm size (8.4 percent growth) and Rs56.2 billion to economic farm size and Rs301.7 billion to the above economic farm size (12.7 percent growth).

Under non-farm sector, agriculture lending institutions disbursed Rs102.1 billion to small farms, a negative growth mainly due to lower credit offtake especially in poultry sector. An amount of Rs343.7 billion has been disbursed to large farms showing a positive growth of 3 percent.

In terms of sectoral and purpose wise performance of agriculture credit sectors, the production loans of farm sector grew by 5.0 percent and development loans increased by 93.7 percent during the period FY2021 (July-March). The livestock/dairy and meat sector witnessed 5.6 percent growth with poultry sector recording 11.2 percent decline during the period under review.

It may be mentioned here that currently, 50 agriculture lending institutions are providing agricultural loans to farmers including five major commercial banks, two specialised banks (ZTBL & PPCBL), 14 domestic private banks, 5 Islamic banks, 11 microfinance banks and 13 microfinance institutions/rural support programmes (MFIs/RSPs).

Copyright Business Recorder, 2021