Agri credit rises to Rs326bln in July-March

KARACHI: Agriculture credit by banks surged 27.5 percent to Rs326 billion in the first nine months of the current fiscal year as compared to Rs255.7 billion during the same period last year, the central bank said on Monday.
With this increase, the banks achieved 65.2 percent of their annual target of Rs500 billion fixed by the State Bank of Pakistan (SBP) for the fiscal year 2014/15.
The outstanding portfolio of agriculture loans during March saw 11.2 percent growth to stand at Rs312.7 billion as against Rs281.1 billion in the corresponding month of the previous year, it said.
Analysts said the upward trend in bank agriculture credit disbursements is encouraging. However, the banks’ share in agriculture lending may increase further if the demand and supply side constraints are removed.
Constraints to agriculture credit can be sorted out if the banks are willing to hire and train specialised human resource for agriculture financing and further simplify their lending procedures to facilitate farmers, they said.
Agriculture credit by all banks posted a decent growth during July-March FY15, the trend in domestic private banks and Islamic banks is more pronounced.
According to the central bank figures, five major banks as a group disbursed Rs167.4 billion, or 66.3 percent, of their annual target. Two specialised banks Zarai Taraqiati Bank and Punjab Provincial Cooperative Bank disbursed Rs62.1 billion, or 61.2 percent, of their annual targets of Rs101.5 billion, it said.
Fifteen Domestic private banks collectively disbursed Rs72.1 billion, or 62.4 percent, against their target of Rs115.6 billion, while seven microfinance banks have extended Rs20.7 billion, or 73.6 percent, of their annual targets, the central bank said. However, four Islamic banks as a group had already surpassed their annual targets by disbursing Rs3.7 billion against the target of Rs2.3 billion during the period under review.
Among the five major banks, MCB achieved 80.5 percent of its annual target, UBL 76.7 percent, HBL 75.3 percent, NBP 55.3 percent, while ABL could achieve only 45.2 percent of its annual target. Within 15 domestic private banks, Bank of Khyber achieved 90.4 percent, Faysal Bank achieved 81.1 percent, JS Bank 64.8 percent, NIB Bank 58.5 percent, Sindh Bank 56.3 percent, Bank Al-Habib and Bank Alfalah 54.9 percent each, Soneri Bank 50.6 percent, Silkbank 48.8 percent and Summit Bank achieved 46.8 percent.
However, Askari Bank and Bank of Punjab achieved only 40.9 percent each of their annual targets during July-March FY15.
Standard Chartered had already surpassed its annual target of Rs2.5 billion by disbursing Rs3.8 billion during July-March FY15 period. Seven microfinance banks as a group disbursed Rs20.7 billion, or 73.6 percent, against their annual target of Rs28.2 billion, the SBP added.