Banks allocated Rs598.3 billion in agricultural credit almost meeting the target of Rs600bn set during 2015-16 for loans to farmers. The amount is 16 per cent higher when compared with Rs515.9bn farm loans extended during FY15.
Despite negative growth of agriculture sector due to a number of real side factors, agricultural financing continued with its increasing momentum of the last few years. The outstanding portfolio of these loans has also increased by Rs32.3bn i.e. from Rs313.3bn as of June 30, 2015 to Rs345.6bn as of June 30, 2016, recording 10.3pc growth during the year.
“The number of farmers served by banks also increased from 2.2 million to 2.4m,” said the State Bank of Pakistan (SBP) report.
It said that achieving agriculture credit disbursement target was an uphill task for the institutions due to various financing issues and challenges like low production of major cash crop especially cotton, climate change, price fluctuation of produce, market linkage gaps and high risk perception of banks about agriculture financing.
The detailed review of banks’ agriculture loan performance reveals that five major banks collectively disbursed Rs311.4bn or 101.9 per cent of their annual target of Rs305.7bn, which is higher by 18.4pc from Rs262.9bn last year.
Amongst the five major banks, NBP, HBL, MCB surpassed their annual targets at 109.2pc, 102pc and 101pc, respectively, UBL met 100pc and ABL could achieve 87pc of its target.
Under specialised banks, ZTBL disbursed Rs90.97bn, or 89pc, of its annual target of Rs102bn while PPCBL disbursed Rs10.3bn, achieving 82pc in FY16.
A group of 15 domestic private banks achieved 93.4pc of the target. Within this group, Summit, JS bank, Bank Alfalah, Habib Metropolitan, Sindh Bank, Soneri and Bank of Khyber surpassed their targets. However, NIB bank achieved 94pc, First Women Bank 87.5pc, Bank Al Habib 88.5pc, Standard Chartered 87pc, Faysal 84pc, Askari 84pc, Silk 77.7pc and Bank of Punjab achieved 43pc of the target during the year.
Nine microfinance banks as a group surpassed the target of Rs40bn by disbursing Rs53.9bn, or 134.4pc, during the fiscal year. Microfinance Bank, Khushhali, First Microfinance, Tameer, Mobilink Microfinance, U Microfinance, FINCA Microfinance and APNA Microfinance bank surpassed their targets while Pak Oman achieved 84pc of its target.
Five Islamic banks as a group also surpassed their annual targets by disbursing Rs8.5bn against the target of Rs7.9bn. Amongst the group, Meezan, Albaraka and Dubai Islamic Bank exceeded their targets. BankIslami achieved 96.8pc of its target, whereas, Burj Bank could achieve only 40pc of its set target during FY16.