The banks have made agricultural credit disbursement of Rs 598.3 billion which is almost 100 per cent of the overall annual target of Rs 600 billion and 16 per cent higher than the disbursement of Rs 515.9 billion made during 2014-15.
It is important to note that despite negative growth of the agriculture sector due to a number of factors, agriculture financing continued its increasing momentum of the last few years. The outstanding portfolio of agriculture loans has also increased by Rs 32.3 billion from Rs 313.3 billion on end June 2015 to Rs 345.6 billion on end June 2016, recording 10.3 per cent growth during the year. The number of farmers served by the banks also increased from 2.2 million to 2.4 million.
The achievement of agriculture credit disbursement was an uphill task for agri-lending institutions due to various financing issues and challenges including low production of major cash crops especially cotton, climate change, price fluctuation of agri-produce, marketing linkages gaps and high risk perception of banks about agri-financing, etc, sources said.
In addition to implementing various budgetary initiatives, the SBP made concerted efforts for achieving the agri-credit disbursement target set by government, the sources said and added that these efforts included provision of enabling regulatory environment, sensitising banks to adopt agri-financing as a viable business line, exploring new financing avenues including, agriculture value chain financing, warehouse receipts financing, execution of credit guarantee scheme for small and marginalised farmers and rigorous monitoring of banks’ lending performance.
Sources said the SBP was able to achieve this target through continued support of the government and the leadership role of SBP Governor Ashraf Mahmood Wathra and Deputy Governor Saeed Ahmad through conducting regular performance review meetings with banks and other stakeholders. The governor and deputy governor congratulated and thanked the CEOs/presidents of banks on meeting their targets and encouraged them to further enhance agriculture credit in view of the sector’s contribution in economic growth, employment and exports.
The detailed review of banks’ performance reveals that five major banks collectively disbursed agri-loans of Rs 311.4 billion or 101.9 per cent of their annual target of Rs 305.7 billion which is higher by 18.4 per cent from Rs 262.9 billion disbursed during the corresponding period of last year. Among the five major banks, the NBP has not only surpassed its annual target by achieving 109.2 per cent but also made a major contribution in overall target achievement. HBL achieved 102.4 per cent of the target, MCB 101.8 per cent, UBL 100.4 per cent of their respective targets, while ABL achieved 86.9 per cent of its annual target.
Among specialised banks, ZTBL disbursed Rs 90.97 billion or 89.2 per cent of its annual target of Rs 102 billion while PPCBL disbursed Rs 10.3 billion by achieving 82.7 per cent of its target of Rs 12.5 billion during 2015-16.
As many as 15 domestic private banks as a group achieved 93.4 per cent of their target. Within this group, Summit, JS bank, Bank Alfalah, Habib Metropolitan, Sindh Bank, Soneri and Bank of Khyber have surpassed their annual targets. However, NIB bank achieved 94.3 per cent, First Women Bank 87.5 per cent, Bank Al Habib 88.5 per cent, Standard Chartered 87.3 per cent, Faysal 84.7 per cent, Askari 83.9 per cent, Silk 77.7 per cent and Bank of Punjab achieved 43 per cent of the annual target during the period under review.
The 9 microfinance banks as a group also surpassed their annual target of Rs 40.1 billion by disbursing agriculture loans of Rs 53.9 billion or 134.4 per cent of their target during 2015-16. NRSP Microfinance bank, Khushhali, First Microfinance, Tameer, Mobilink Microfinance, U Microfinance, FINCA Microfinance and APNA Microfinance bank have surpassed their targets while Pak Oman achieved 84.4 per cent of its annual target.
As many as five Islamic banks as a group also surpassed their annual targets by disbursing Rs 8.5 billion against the target of Rs 7.9 billion. Among the group, Meezan, Albaraka and Dubai Islamic Bank have surpassed their annual targets while BankIslami achieved 96.8 per cent of its annual target. However, Burj Bank could achieve 40 per cent of its target during 2015-16.