Banks dis­bursed Rs1.2tr to agri sec­tor in FY20

The Pak Banker - - FRONT PAGE - KARACHI

Banks dis­bursed Rs1,215 bil­lion to the agricultur­e sec­tor in fis­cal year 2019-20, which was 3.5% higher than the pre­vi­ous fis­cal year but was less than the tar­get of Rs1,350 bil­lion set by the Agri­cul­tural Credit Ad­vi­sory Com­mit­tee (ACAC) in Novem­ber 2019.

"The fac­tors which have con­strained the growth of agri­cul­tural credit in­clude the im­pact of Covid-19 pan­demic, lo­cust at­tack and con­tin­u­ing real side is­sues in­clud­ing wa­ter short­age, low pro­duc­tion of cot­ton and sug­ar­cane, low off­take of fer­tilis­ers and volatil­ity in prices of agri­cul­tural pro­duce," said the State Bank of Pak­istan (SBP) in a state­ment is­sued.

The out­stand­ing port­fo­lio of agri­cul­tural credit in­creased to Rs581 bil­lion in late June 2020, reg­is­ter­ing a growth of 3.3% com­pared with pre­vi­ous year's level of Rs562 bil­lion.

How­ever, the num­ber of agri­cul­tural bor­row­ers de­clined from 4.01 mil­lion in June 2019 to 3.74 mil­lion by the end of June 2020 due to the Covid-19 lock­down sit­u­a­tion in the coun­try, it said.

The state­ment added that the anal­y­sis of dis­burse­ment re­vealed that dur­ing FY20, five ma­jor com­mer­cial banks col­lec­tively dis­bursed agri­cul­tural loans of Rs708.3 bil­lion or 100.5% of their an­nual tar­get of Rs705 bil­lion.

How­ever, spe­cialised banks dis­bursed Rs71.1 bil­lion or 62.9% of their an­nual tar­get of Rs113 bil­lion and 14 do­mes­tic pri­vate banks, as a group, achieved 88.7% of the tar­get by dis­burs­ing Rs225 bil­lion against their tar­get of Rs253.6 bil­lion.

Five Is­lamic banks, as a group, achieved 76.6% of their an­nual tar­get of Rs55 bil­lion by dis­burs­ing Rs42.1 bil­lion, which was 6.1% higher than the dis­burse­ment made in the pre­vi­ous year. Sim­i­larly, the Is­lamic win­dows of com­mer­cial banks dis­bursed Rs43.5 bil­lion, or 79.2%, against the tar­get of Rs55 bil­lion for FY20, which was 33% higher from the dis­burse­ment of Rs32.7 bil­lion made last year, it added.

The agri­cul­tural credit dis­burse­ment by the mi­cro­fi­nance sec­tor re­mained rel­a­tively slug­gish due to the lock­down im­posed to con­tain the spread of Covid-19 in the sec­ond half of FY20.

Mi­cro­fi­nance banks (MFBs), as a group, achieved 75.7% of the tar­get by dis­burs­ing agri­cul­tural loans of Rs139.3 bil­lion to small farm­ers, which were 9.5% lower than the dis­burse­ment of Rs154 bil­lion in the pre­vi­ous year.

Like­wise, the mi­cro­fi­nance in­sti­tu­tions/ru­ral sup­port pro­grammes col­lec­tively achieved 73.4% of their tar­get by dis­burs­ing Rs28.9 bil­lion, which was 15% lower than the dis­burse­ment of Rs34 bil­lion made last year to the small and marginalis­ed farm­ers.

The cen­tral bank had ear­lier an­nounced a re­lief pack­age in col­lab­o­ra­tion with dif­fer­ent stake­hold­ers for the agricultur­e sec­tor to deal with ad­verse im­pli­ca­tions of the pan­demic for the farm­ing com­mu­nity and agri­cul­tural busi­nesses in the down­stream value chains.

At the mo­ment, he said most of the em­ploy­ers paid their con­tri­bu­tions man­u­ally by down­load­ing PR-03 form. The man­ual sub­mis­sion of con­tri­bu­tions un­der­mined the ef­forts of EOBI in achiev­ing the rev­enue col­lec­tion tar­get, he added.

To a query, he said out of 31,000 ac­tive em­ploy­ers, only 10 per cent had been us­ing the In­ter-bank Fund Trans­fer fa­cil­ity.

High­light­ing the propen­sion­ers ini­tia­tives, he said the ef­forts were afoot to en­sure pro­vi­sion of pen­sion to old and bed-rid­den pen­sion­ers at their doorsteps by Sep­tem­ber 1. A Mem­o­ran­dum of Un­der­stand­ing had been signed with Bank Al-Falah for the pur­pose.

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