Pakistan may miss agriculture credit target | Pakistan Today

Pakistan may miss agriculture credit target

KARACHI: Pakistan is likely to miss its target of disbursing Rs 270 billion in agriculture credit through commercial and specialised banks during the current financial year, 2010-11.
State Bank of Pakistan (SBP) statistics show that the country’s banking sector lend some Rs 56.693 billion during first four months of the current fiscal year (July-October FY2010-11), compared to Rs 62.838 billion in the corresponding period, last year.
During the period under review, borrowing by the embattled agricultural sector dipped by Rs 6.145 billion or 10 percent year-on-year compared to the same period in FY2009-10.
“The downward trend in agriculture credit disbursement is attributable to post-flood situation in the country,” SBP Chief Spokesman Syed Wasimuddin told Pakistan Today. The Agriculture Credit Advisory Committee (ACAC) of the central bank has set an indicative target of Rs 132.450 billion to be disbursed till June 30, 2011, an effort spearheaded by five large commercial banks including Allied Bank Limited, Habib Bank Limited, MCB Bank Limited, National Bank of Pakistan and United Bank Limited.
Specialised banks, Zarai Taraqiati Bank Limited (ZTBL) and Punjab Provincial Cooperative Bank Limited (PPCBL), are to provide Rs 88.650 billion.
14 domestic private banks are expected to release agriculture loans of Rs 48.900 billion during the ongoing fiscal year. A downward trend in lending to farmers indicates that the agriculture credit target is likely to be missed yet again; the SBP spokesman clarified that the target is indicative and not binding. It may be recalled that for the last two years, the banks had been unable to achieve the SBP’s agriculture loaning targets for various reasons.
According to the central bank, overall credit disbursement by the five major commercial banks stood at Rs 35.133 billion during July-Oct FY10-11 against Rs 36.915 billion last year, showing a decrease of Rs 1.781 billion or 4.8 percent. During this period, the largest specialized bank, ZTBL, released a total of Rs 7.981 billion in loans, down considerably by 45.2 percent or Rs 6.6 billion, when compared to Rs 14.585 billion of the same period last year. The Punjab Provincial Cooperative Bank was the exception to the rule and is growing fast, registering a robust growth of 73.6 percent during the current fiscal year.
The disbursements by 14 domestic private banks also remained encouraging during the said period and depicted a growth of 16.24 percent or Rs 1.729 billion when compared with last year’s Rs 1.064 billion.
Wasimuddin was noncommittal when asked if the loan target would be missed this year. “It would be premature to give a definitive statement; there are still eight months to go in the year,” the spokesman added.

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