KARACHI: The banks’ disbursement for agricultural credit during the first half of this fiscal year remained below the target but surpassed the 1HFY18 level, said the State Bank of Pakistan (SBP) on Saturday.
In the first half of 2018-19, banks disbursed Rs527.3 billion, which is 42.2 per cent of the total target for FY19 and 22pc higher than the disbursement made during same period last year.
While presiding a review meeting of Agriculture Credit Advisory, SBP Governor Tariq Bajwa asked banks to enhance their efforts in order to reach the annual credit target. “I would urge the stakeholders including banks, federal and provincial governments to harness technology platforms for enhancing agriculture,” said Bajwa on Saturday.
The outstanding portfolio of agriculture credit also increased to Rs521bn by end of December 2018, up 17.9pc, from Rs442bn last year. Meanwhile, the number of outstanding borrowers also rose to 3.9 million by end of 2018, from 3.46m last year, representing a growth of 12.8pc.
Bajwa also appreciated the efforts of microfinance banks and institutions in providing funding to small and marginalised farmers.
The governor pointed out that despite witnessing reasonable progress during FY19, the industry still faces various demand and supply-side challenges.
In particular, he highlighted the geographical disparities in provision of agriculture credit as the disbursements to KP, Balochistan and Gilgit Baltistan still remain far from their respective targets.
Likewise, banks were advised to pay special focus to production loans for small farmers. Bajwa also emphasised that banks should enhance their outreach in terms of agricultural infrastructure by hiring agricultural credit officers.
He appreciated the efforts of Islamic banks in achieving 80pc growth in disbursement during the July-Dec 2018, compared to same period last year. However, they still account 3pc of the total agricultural credit disbursement.
The governor urged banks to adopt a more focused approach especially towards the underserved areas for achieving Rs1,250bn agri credit target for FY19, while bringing a qualitative shift in agri financing.
Bajwa also asked Islamic banks and Islamic windows of commercial banks to play an active role in expanding outreach in potential areas, particularly to faith-sensitive farming community