KARACHI, March 18: Banks involved in agricultural loaning disbursed about Rs65.3 billion farm credit during July-February 2004-05, against the full fiscal year target of Rs85 billion, banking sources told Dawn. In July-February 2003-05, banks had made Rs43.3 billion farm loans against the full year target of Rs65.5 billion. Thus, the farm credit disbursement in the first eight months of this fiscal year has increased by roughly 51 per cent. But as credit plan makers have told the banks to increase agricultural lending to Rs100 billion during this fiscal year, up from the initial target of Rs85 billion, the banks have a long way to go to come up to their expectation. Besides, the share of agricultural credit in overall private sector credit is still low. (Whereas agricultural credit expanded by Rs65.27 billion in July-February 2004-05, the overall private sector credit rose by Rs322 billion between July 1, 2004 and February 26, 2005). There are 21 banks involved in the agricultural credit disbursement, including five major commercial banks, 14 local private banks and the Zarai Taraqiati Bank and the Punjab Provincial Cooperative Bank. They get individual targets from the State Bank for the disbursement of agricultural credit in a fiscal year and they are penalized if the targets slip by.
What is encouraging about the farm credit disbursement during July-February 2004-05 is that during these eight months, 14 local banks have exceeded their full year target of Rs5 billion by Rs1 billion. Privatized Habib Bank Ltd has also almost achieved its target of Rs10 billion. But given the fact that local private banks have branched out into rural and semi rural areas in the recent past and HBL already has a huge branch network in rural Pakistan, their current level of farm lending is still below their potential.
Besides, since the Agricultural Credit Advisory Committee that draws and reviews agricultural credit plan has revised upward the initial agricultural credit disbursement target of the entire banking system (from Rs85 billion to Rs100 billion), higher-than-originally-targeted lending by HBL and 14 local banks needs to be boosted further in the remaining months of this fiscal year. This also applies on agricultural lending by other major commercial banks, ZTBL and PPCB.
State-run National Bank disbursed agricultural loans worth Rs11.67 billion during the first eight months of this fiscal year against the target of Rs15 billion. Privatized Muslim Commercial Bank and UBL lent Rs3.88 billion and Rs2.96 billion, respectively, against their target of Rs5 billion each. Allied Bank disbursed Rs2.88 billion farm loans during July-February 2004-05 against the target of Rs3 billion. Thus, all the five major commercial banks made Rs31.14 billion farm loans during this period against the full year target of Rs38 billion.
Agricultural lending by ZTBL and PPCB stood at Rs22.72 billion and Rs5.33 billion in first eight months of this fiscal year against their full year targets of Rs34bn and Rs8bn, respectively. Fourteen local private banks lent Rs6.06 billion to the farming community in July-February 2004-05, exceeding the full fiscal year target of Rs5 billion.
These banks are: Askari Commercial Bank, Bank Al-Habib, Bank Alfalah, Bolan Bank, Faysal Bank, Metropolitan Bank, PICIC Commercial Bank, KASB Bank, Prime Commercial Bank, Saudi Pak Commercial Bank, Soneri Bank, The Bank of Khyber, The Bank of Punjab and Union Bank.
Though banks continue to lend more to the farming community both for raising crops as well as for purchase of agricultural machinery and inputs, etc., small farmers complain of little access to banks’ loans.
