KARACHI, March 29: The Punjab has emerged as the main beneficiary of agricultural loans as the province consumed 84 per cent of entire loans disbursed by the banks during July-Dec 2007-08

According to the State Bank’s fresh data on agricultural loans, rest of the 16 per cent was consumed by Sindh, the NWFP, Balochistan, Azad Kashmir and Northern Areas.

The SBP released this kind of data for the first time.

The new study of the State Bank has been conducted to give a real picture of the agricultural loan distribution to policy makers. It carried out this study to collect data of district-wise disbursement of loans.

In the first six months of the current fiscal year, banks disbursed Rs90.3 billion to agricultural sector, while Punjab consumed Rs75.6 billion out of this total amount, which makes it 83.7 per cent.

Sindh, being the second largest province got Rs10.2 billion for agriculture sector during the period under review. The situation is pathetic for other provinces as Balochistan looks completely neglected part of the country as far as the agriculture loan is concerned.

During this stated period Balochistan received just Rs200 million, which was even less than AJK which received Rs400m.

The NWFP received only Rs3.9 billion for agricultural sector. This distribution trend shows that either the banks are not interested in areas other than Punjab, or the representatives from the respective provinces never bothered to take care of their agricultural sector. All provinces had their own governments for five years while they also had representations in the lower and upper houses including ministries in the last assembly.

The study showed that almost all districts of Punjab were active participants and all of them received agricultural loans.

The district-wise data reveals that banks disbursed agricultural loans in all 36 districts of Punjab and 23 districts of Sindh whereas the disbursement in NWFP, Balochistan and AJK, NAs and Fata restricted to 20, 22 and 7 districts, out of total districts of 24, 30 and 21, respectively.

The average disbursement per district stood at Rs2.1 billion in Punjab, Rs400 million in Sindh, Rs160 million in the NWFP and only Rs7 million and Rs29 million in Balochistan and AJK, respectively.

The district-wise average disbursement of credit shows the gap is too wide while comparing it with Punjab

Major recipients of agricultural loans were Lahore, Rawalpindi, Sheikhupura, Kasur, Multan, Muzaffargarh, Bahawalpur, Bahawalnagar, Sialkot, Khanewal, and Mianwali in Punjab; Hyderabad, Khairpur, Karachi, Sukkur, Sanghar, Ghotki and Nawabshah in Sindh; Mardan, Charsadda, D.I. Khan, Swabi, Swat, Nowshera and Mansehra in the NWFP; Quetta, Nasirabad and Jaffarabad in Balochistan; Muzaffarabad, Kotli and Bagh in AJK; and Gilgit in Northern Areas.

The data depicts that the major thrust of agricultural financing is towards farm sector. Out of total disbursements of Rs90.3 billion, an amount of Rs66.3 billion (73 per cent) was disbursed in farm sector and Rs24 billion (27 per cent) to non-farm sector

The bank-wise data reveals that the five big commercial banks and Zarai Taraqiati Bank Limited (ZTBL) extended country-wide loans. However, disbursement by other commercial banks was restricted to areas based on their branch network in respective districts.

Punjab Provincial Co-operative Bank Limited (PPCBL), being a provincial bank, has covered all districts of Punjab, while Bank of Punjab covered all districts in the province in addition to one district in Sindh and three districts in the NWFP.

With a view to analysing the current agricultural loaning at the grassroots level and to identify the gaps between demand and supply of agricultural financing, the State Bank has rationalised agricultural credit data base with effect from July 2007, whereby banks are sending agricultural credit data on size of loan, land holding-wise disbursement, and district-wise loan data, etc.

The SBP says the move is part of various initiatives, including guidelines, schemes on agricultural financing, capacity building of banks and creating awareness amongst the farming community, to continuously enhance the flow of credit to the agriculture sector.

The SBP said the data will help researchers, economists, policy-makers and other stakeholders in policy formulation.