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Banks disburse Rs43 billion farm credit:
July-Feb 2003/04
KARACHI, March 31: Banks have disbursed Rs43.16
billion farm credit in the first eight months of
this fiscal year i.e. between July/February
2003/04 against the full fiscal year target of
Rs65.5 billion. Thus the banking system has
already achieved 66 per cent of the total farm
credit disbursement target set for this fiscal
year.
State Bank sources say that the bulk of this farm
credit was disbursed by five major banks namely (i)
National Bank (ii) Habib Bank (iii) United Bank
(iv) Muslim Commercial Bank and (v) Allied Bank.
These banks combined disbursed Rs19.33 billion
farm credit during July/February 2003/04 thus
achieving 86 per cent of their target. They are
supposed to disburse at least Rs22.4 billion to
the agricultural sector under the State Bank
mandatory farm credit scheme during the entire
fiscal year 2004 ending in June.
The sources say that Zarai Taraqiyati Bank Ltd. (ZTBL)
also disbursed Rs17.77 billion during this period
thus achieving 54 per cent of its full fiscal year
target of Rs33 billion.
They said that the Punjab Provincial Cooperation
Bank made farm loans of Rs4.69 billion which was
around 65 per cent of their full fiscal year
target of Rs7.5 billion.
Fourteen local private banks disbursed
agricultural credit of Rs1.37 billion only but
even at this level the amount was equal to 52 per
cent of their full fiscal year target of Rs2.6
billion.
The list of the banks include (i) Askari
Commercial Bank (ii) Bank Al-Habib (iii) Bank Al-Falah
(iv) Bolan Bank (v) Faysal Bank (vi) Metropolitan
Bank (vii) PICIC Commercial Bank (viii) KASB Bank
(ix) Prime Commercial Bank (x) Saudi Pak Bank (xi)
Soneri Bank (xii) The Bank of Khyber (xiii) The
Bank of Punjab and (xiv) Union Bank.
Central bankers say whereas disbursement of a
certain amount of money in farm credit is
mandatory for five major commercial banks the full
year targets of other banks are indicative in
nature.
They say that the Rs43.16 billion agricultural
credit offered by the banks was part of the
overall bank borrowing of the private sector in
July/February 2003/04 which reached at Rs230
billion.
They say that the farm credit of Rs43.16 billion
disbursed in eight months of this fiscal year
included both short term as well as medium term
loans. Short term loans are extended for a period
of six to nine months for purchase of seeds/
fertilizers/pesticides and fuel for tractors etc.
Medium term loans are advanced for five to 10
years and are given for investment purposes like
purchase of tractors or installation of tubewells
and construction of water reservoirs etc.
Top bankers admit that at Rs43.16 billion
agricultural credit disbursement was quite low as
a percentage of overall private sector credit. "We
could have lent more," admitted head of a large
local bank citing cumbersome recovery procedure of
farm loans as a reason for not-so-good
disbursement.
But he shared the market perception that major
banks could easily boost farm credit disbursement
taking advantage of their large rural branch
networks if the focus on agricultural credit
marketing and develop special skills in this area.
"We are going to induct 100- 150 mobile credit
officers whose job would be to visit farmers and
assess their credit worthiness," he said.
The SBP second quarterly report released here on
Tuesday says there is enough potential for the
banks to maintain what it calls a fast growing
farm credit disbursement trend. The report points
out that at present out of the total of 6.6
million farm owners only one million have the
access to the institutional credit.
"Therefore the future growth in agricultural
credit mostly depends upon the outreach of the
banks and the innovations they (the banks) bring
in this field," observes the report.
The report says that despite the negative impact
of lower than the targeted cotton crop and the
loss to poultry sector due to the bird-flu virus
agriculture sector is expected to grow by 3.7-4.2
per cent. Originally 4.2 per cent growth target
was projected for the agriculture sector during
this fiscal year.
The DAWN |
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Pakissan.com; Advisory Point
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