Banks given Rs1.8 trillion farm, The State Bank of Pakistan (SBP) has assigned an annual agriculture credit disbursement target of Rs1.8 trillion to the financial institutions for this fiscal year to cater to the agriculture credit demand in the country, a statement said on Friday.
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Banks given Rs1.8 trillion farm, Moreover, in line with the national food security requirements and the need for mechanisation of farms to enhance agriculture productivity, specific targets of Rs140 billion for production loans of the wheat crop, Rs45 billion for tractor financing, and Rs20 billion for financing for harvesters, planters, and other farm machinery have also been set under the overall target for FY2023. In addition, the SBP has also enhanced the per acre indicative credit limits for agriculture financing to support the farming community to avail adequate financing from banks and optimise their agriculture inputs’ usage. With a view to ensuring food security, the per acre indicative credit limit for wheat has been enhanced from the existing Rs60,000 to Rs100,000 which will allow farmers to deploy quality inputs for improved yields. During FY2022, financial institutions managed to disburse Rs1.41 trillion to agriculture sector compared with the disbursement of Rs1.36 trillion in the previous year, whereas the outstanding agriculture credit recorded an encouraging growth of over 10 percent and reached Rs691 billion by the end of June 2022.
Banks given Rs1.8 trillion farm, The unprecedented disbursement and growth in the agriculture credit portfolio were supported by various recent initiatives of SBP to promote agriculture credit and financial inclusion in the country, the SBP said. “One of the major recent initiatives of SBP was the introduction of a comprehensive agriculture credit scoring model to bring the focus of banks towards improving qualitative aspects and regional distribution of agriculture financing in the country,” it said. “The model, adopted by the Agricultural Credit Advisory Committee, provides individual scores reflective of each bank’s agriculture credit performance against multi-dimensional criteria based on various indicators including sectoral disbursement, regional performance, outstanding amount, and outstanding borrowers, etc,” it added. Recently, growth in agriculture credit disbursement remained subdued due to various challenges such as adverse climate change effects, resource constraints in banks, underutilisation of approved limits by borrowers etc, while a few banks, particularly large public sector banks, among others, also performed slower than usual and struggled to achieve their assigned annual targets, according to the SBP. The central bank has also released the annual ranking of banks under this scoring model to bring transparency and competition among the various agriculture credit providers. As per the model’s results for FY2022, HBL ranked on top among large banks with a score of 75.4. Bank of Punjab scored 62.1 and ranked highest among mid-sized banks, and BankIslami stood first among small banks with a score of 55.7. Further, U Microfinance Bank ranked the highest among microfinance banks with a score of 80.4.
Source: The news is originally published by thenews