Agricultural credit target achievements in FY2018-19
The current year�s disbursement is 21% higher than the last year�s disbursements of Rs972.6 billion
KARACHI (Dunya News) – Banks made disbursements of Rs1,174 billion or 94% against the ambitious target of Rs1,250 billion set by Agricultural Credit Advisory Committee for 2018-19. The achievement of agri. credit disbursement is a sizable performance in agri. lending despite number of demand and supply side challenges.
The current year’s disbursement is 21% higher than the last year’s disbursements of Rs972.6 billion. Further, the agri. outstanding portfolio increased to Rs562.4 billion on end June, 2019 registering a growth of 20% compared with the last year’s position of Rs469.4 billion. Similarly, the agricultural credit outreach has increased to 4.01 million farmers or 91% against target of 4.42 million farmers at end June 2019, recording growth of 8% from 3.72 million farmers at end June 2018.
To achieve these numbers, SBP adopted a multifaceted strategy and made concerted efforts for pursuing a massive agricultural credit target which included; sensitizing banks to adopt agri. financing as a viable business line, exploring new avenues of financing, value chain financing, mobilizing e-credit, warehousing receipt financing, implementation of crop/livestock insurance and credit guarantee schemes for the farmers etc.
The achievement could be made due to the integrated efforts of federal/provincial governments, SBP, financial institutions and other stakeholders. Further, the efforts included rigorous follow up with the top management of banks and agri. credit heads and conducting regular follow-up meetings with regional management were instrumental for target monitoring. Conducting regular farmers’ awareness & financial literacy programs across the country, initiation of one window operation in KPK and holding job fairs for agri. graduates in underserved provinces were also helpful. Moreover, the support of SBP BSC field offices in monitoring the district/regional targets was also supportive.
The detailed credit performance reveals that during FY 2018-19, five major commercial banks collectively disbursed agri. loans of Rs653.5 billion or 100.4% of their annual target of Rs651 billion, specialized banks disbursed Rs81.2 billion or 71.8% of their annual target of Rs113 billion and fifteen domestic private banks as a group achieved 86.5% by disbursing Rs211.9 billion against their target of Rs245 during FY-2018-19.
Moreover, Microfinance Banks (MFBs) as a group have achieved 98.7% by disbursing agri. loans of Rs154.0 billion to small farmers which is 23% higher than the disbursement of Rs124.8 billion during same period last year. Similarly, the Microfinance Institutions/Rural Support Programs collectively achieved 97.1% of their targets by disbursing Rs34.0 billion to small and marginalized farmers during FY 2018-19.
Five Islamic Banks as a group achieved 78.8% of their annual target of Rs50.0 billion by disbursing Rs39.4 billion which is Rs23 billion higher than the disbursement made during the corresponding period last year. Further, in order to mobilize the Islamic Windows of commercial banks for agricultural financing, the disbursement targets of Rs50.0 billion were assigned for 2018-19. Accordingly, the windows of commercial banks as a group disbursed Rs32.7 billion or 65.4% of the annual targets to faith sensitive clients during FY 2018-19.
