LAHORE, May 20: The Agriculture Development Bank of Pakistan (ADBP) has shown six per cent growth in the recovery of its loans during the first 10 months of the current fiscal year as compared to the corresponding period last year.
“We have recovered some Rs22.450 billion this year as against Rs21.400 billion,” ADBP chairman Istaqbal Mehdi told reporters at a briefing at its head offices in Islamabad last week. The bank is hoping to recover Rs30-32 billion by the end of this fiscal.
“The current recovery rate of 79 per cent shows an improvement of seven per cent over last year’s 72 per cent,” he claimed. “The current growth in recovery of loans has been achieved in spite of a persisting drought and a war-like situation on the borders with India. The impact of such factors on the bank’s recovery campaign is yet to be calculated. But it surely is going to be huge.”
In the same period, the bank disbursed total loans of Rs24.600 billion as against last fiscal year’s Rs23.900 billion. “About 87 per cent loans have gone to small farmers,” Mehdi said.
The ADBP, the only specialized agriculture credit institution, has not received any credit line from the central bank or foreign donors or multilateral agencies since 1992. “We are recycling the funds recovered every year for the last one decade,” the chairman said. “The bank was written off by the multilateral agencies. And they stopped providing funds to it.”
However, he insisted, “the situation had changed in the recent months due to measures taken to revamp the bank as both the Asian Development Bank and the World Bank are thinking of providing the bank with credit lines.” These credit lines would be in the shape of open-ended technical assistance.
Half of the bank’s total exposure of Rs95 billion is stated to be “classified or non-performing portfolio”. However, about 36 per cent of the classified portfolio comes under 90-day default, said the bank officials. The rest is hardcore default, they said. “The big farmers/landlords are the major defaulters. The small farmers are always good borrowers,” they said.