LAHORE, Sept 23: The Punjab Provincial Cooperatives Bank will disburse Rs8 billion among farmers during the current fiscal year, the Board of Directors has decided. Half of the money will be available in Kharif and half in Rabi.
While talking to Dawn, Punjab Minister for Cooperatives Malik Muhammad Anwer claimed that the bank had already decided to switch to personal loaning in the form of micro-finance.
The above-mentioned amount would be split on the basis of a 75-25 per cent ratio. The 25 per cent would go to individuals applying for loans to buy agriculture implements. A personal loan of Rs500,000 could be obtained for three, five and seven years, he said.
Explaining the rationale behind the planned switch-over, Malik Anwer said that all the so-called societies had been getting short-term loans for a season. They return the money but return in a week’s time to get more for the next crop. They are thus caught in a cycle of poverty and loans. The true spirit of loan disbursement is to put these people back on their feet. But this has not happened.
He said that after the permission of State Bank, the department would progressively change the ratio in favour of personal loaning. Only with these comparatively longer-term loans, people may be able to get full benefits and set themselves on the road to self-sufficiency, he hoped.
In order to weed out the one-man and bogus cooperative societies, the department has requested district Nazims, district coordination officers (DCOs), departmental employees and members of the parliament to point out all such societies so that they could be de-notified and money saved. The department has set Oct 30 as the deadline for such information to reach it.
Before this exercise, the department had only one report on the societies financed by the State Bank, which was prepared by the Punjab Economic Research Institute. This report terms over 97 per cent societies in the province bogus. But the department does not agree with the reported figures. However, it does concede that the situation may not be much better. For this reason, all public representatives and DCOs have been involved in the exercise of spotting bogus societies. They would at least form an independent source of information.
There are verifiable reports that department representatives have been running their cooperative societies and getting loans in their name. So, they cannot be depended upon for reports. The department also explored the option of an independent study but realised that all such surveys are produced on the basis of sampling, like the Gallop polls, which cannot be fully reliable. With the involvement of district governments and the bureaucracy, it would be a big achievement if the department can find out even 30 per cent of the bogus societies, he said.
The bank recovery rate has been 98 per cent so far, but it has failed to achieve its intended target of putting all the loanees back on their feet, he lamented.
Malik Anwer said that a campaign had been launched for recovering the stuckup loans and employees given the deadline of Dec 30.
The bank plays an important role in the agriculture sector and the initiative of individual loaning is a step in this direction. Through long-term small loans, the bank hopes to help farmers get implements like tractors and thrashers and modernize the sector, he claimed.