Banks lend record Rs1.78tr to agriculture sector
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KARACHI: Financial institutions disbursed Rs1.776 trillion under agriculture financing during the previous fiscal year, which was 25 per cent higher year-on-year and was around 97.6pc of the agriculture credit target set by the State Bank of Pakistan (SBP), data showed on Wednesday.
The outstanding portfolio of agriculture credit also grew 10pc to Rs760 billion by the end of June compared to Rs691bn by the end of June 2022.
Among the large banks, those with total assets of over Rs1.5tr, the National Bank of Pakistan emerged as the top performer with a score of 77.4, followed by Meezan Bank (52.4), Habib Bank Ltd (48.1), Bank AL Habib (39.8) and United Bank Ltd (38.3).
The Bank of Punjab topped the category of mid-size banks — those with assets between Rs500bn and Rs1.5tr — with a score of 60.5, followed by JS Bank (38.4), Faysal Bank (35.8), Askari Bank (35.5) and Standard Chartered (26.9).
Disbursed amount 25pc higher than previous year, equals 98pc of target
Similarly, BankIslami was the top performer among small banks — those with assets of less than Rs500bn — with a score of 46.1, whereas U Bank was the top microfinance bank with a score of 80.6.
“The unprecedented performance in FY23 is owed to the collective efforts of the financial institutions and various initiatives taken in the backdrop of several challenges, including the devastating floods of 2022, rising input costs and monetary tightening in recent years,” the SBP said.
Among the various initiatives, SBP’s Champion Bank Model and Agriculture Credit Scoring Model played a key role in supporting financial institutions in extending agriculture financing, particularly in the underserved areas where significant growth was registered in 2022-23, it said.
Besides, the strategic guidance of the Agricultural Credit Advisory Committee (ACAC) coupled with rigorous monitoring of financing by the State Bank provided further support in accelerating agriculture finance.
The last ACAC meeting, held in December 2022, brought the industry’s focus to the potential of Islamic banking to meet farmers’ needs. “As a result, Islamic agriculture financing also grew significantly during the year,” the SBP said.
Published in Dawn, August 10th, 2023
