KARACHI, April 22: Penetration of commercial banks into agriculture sector has rapidly increased as their share in credit to agriculture sector has reached 70 per cent.

The State Bank of Pakistan on Tuesday reported that credit to agriculture increased by 25 per cent during the first 9 months of the current fiscal year.

The total disbursement of credit to agriculture sector reached Rs138.6 billion during the said period which was Rs27.4 billion higher than the corresponding period of last year.

The agriculture sector has been the lowest recipient of credit from commercial banks despite its high contribution to the GDP. The agriculture sector is 23 per cent of the GDP.The change was also noted in the pattern of disbursement as not only the five big commercial banks increased the share in credit to agriculture sector but other domestic banks also contributed significantly higher than last year.

The State Bank reported that overall credit disbursement by five major commercial banks including Allied Bank Limited, Habib Bank Limited, MCB Bank, National Bank of Pakistan and United Bank Limited stood at Rs65.125 billion during July-March, compared with Rs48.962 billion during the corresponding period last year, depicting an increase of Rs16.163 billion in absolute terms or 33.01 per cent.

Zarai Taraqiati Bank Limited, the largest specialised bank, disbursed Rs39.561 billion in the July-March period, compared with Rs40.881 billion last year, while disbursement by Punjab Provincial Cooperative Bank Limited stood at Rs3.935 billion, compared with Rs5.270 billion last year.

Besides, 14 domestic private banks also loaned a combined Rs29.976 billion during July-March period, up 86.39 per cent when compared with Rs16.082 billion disbursed last year.

The SBP has set a target of Rs200 billion for the current fiscal year, up from Rs160 billion in the last fiscal year, showing an increase of Rs40 billion.

During the last fiscal year, commercial and specialised banks had disbursed a total of Rs168.83 billion to the agriculture sector.