Banks lend Rs202bn to farm sector in 11 months

KARACHI: Credit to the agriculture sector will remain much below the target set by the State Bank for the year 2008-09 despite significantly higher disbursement by the commercial banks.

The SBP had set Rs250 billion as the agriculture credit target for the current financial year ending on June 30, 2009. During the eleven months of this year, as reported by SBP on Monday, total agriculture disbursements were Rs202 billion.

The average monthly credit was Rs18.36 billion, while the remaining amount to chase the annual target is Rs48 billion. Banks would not be able to disburse Rs48 billion in one month, which means the annual target for agriculture credit disbursement has already been missed.

The SBP said that credit disbursement by commercial and specialised banks during the July-May rose by 9.31 per cent year-on-on year basis.

However, in absolute terms the agriculture disbursements increased by Rs17.2 billion against Rs184.9 billion made in 11 months of the previous year.

The big five commercial banks increased their agriculture lending by 14.7 per cent to Rs98.2 billion during this period. The big banks are MCB Bank, Habib Bank, United Bank, Allied Bank and National Bank of Pakistan.

Zarai Taraqiati Bank, the single biggest lender to the agriculture sector, also improved its credit growth by 12.8 per cent to Rs63.2 billion.

However, 14 domestic private banks loaned a combined Rs36.6 billion during this period, which was lower than the last year’s disbursement of Rs38.8 billion.

The SBP had set 25 per cent higher target for agriculture sector compared to last year’s target of Rs200 billion. However, the last year disbursements exceeded by Rs12 billion to Rs212 billion. link...