KARACHI (January 07 2004): Participation of the Zarai Taraqiati Bank Ltd (ZTBL) in financing tractor purchase business declined to 25 percent 
during 2003, leaving 75 percent to commercial banks and cash transactions.

The ZTBL, formerly known as Agriculture Development Bank (ADBP), was the only financing source for purchase of tractors and monopolised 100 percent of the business. But last year it could finance only 25 percent of the tractor purchases.

According to reliable figures, total sale of tractors during 2003 was about 3,000 units. Of this, 25 percent was financed by ZTBL, 35 percent by commercial banks, and the remaining 40 percent tractor sale was on cash.

The commercial banks gave greater importance to distribution of development loans, mostly for the purchase of tractors, under the instructions of the State Bank of Pakistan (SBP). Now, more funds are being provided by the banks for this purpose.

According to SBP, the deteriorating situation not only reflected ZTBL inability to compete in the environment created by the commercial banks, but also the need to revamp the existing practice of credit extension, emphasising improvement in business relations with clients.

Courtesy Business Recorder