KARACHI: Government should make efforts to restructure its agrarian finance governance as up to 90 percent of farm loan are offered for production while only 6-10 percent for development in the...
KARACHI: Government should make efforts to restructure its agrarian finance governance as up to 90 percent of farm loan are offered for production while only 6-10 percent for development in the sector, a statement said on Saturday.
“Zarai Taraqiati Bank Ltd (ZTBL) should adopt prudent lending, stringent accounting controls, innovative banking solutions, and austerity measures for a turnaround in longterm as it was in era of 80’s,” Federation of Pakistan Chambers of Commerce & Industry (FPCCI) agriculture standing committee former chief Ahmad Jawad said.
Around 1.7 percent of total agri credit was distributed among farmers in Khyber Pakhtunkhwa, Balochistan, Azad Jammu and Kashmir, and Gilgit-Baltistan, he added.
He was of the view that ZTBL and other banks had no institutional means at their disposal to gather meaningful data about farms and rural businesses.
“They are simply not equipped to make informed investment decisions as far as Agri-financing is concerned. And with non-existent formal financing, agricultural transformation is not possible. So, our population will continue to face food supply issues.”
He said agriculture sector has potential reach 5 percent of GDP target, which could be achieved by ensuring a competitive agri financing, he stated. Jawad continued to say that the organization had failed to increase their borrowers on a substantial numbers because of weak fiscal position.
He also raised questions on high Karachi Interbank Offered Rate (KIBOR) rates, saying it would be difficult for small farmers to bear the financing facility.
“ZTBL president should understand that it’s not a commercial bank rather its role is to serve the country’s agriculture sector.”
Jawad asked State Bank of Pakistan (SBP) to direct ZTBL to start financing to agro-based industries, cold atmosphere stores on special interest rates to give a push to value addition as well as to support agriculture exports of the country. He also urged PM Shehbaz Sharif to take notice of ZTBL pensioners’ matter who were demanding an increase in their pensions.