July 25, 2015
News
Banks over-achieve agri credit target of Rs 500bn in FY15
KARACHI: The banks have surpassed the agricultural credit disbursement target of Rs 500 billion set by the State Bank of Pakistan’s (SBPs) Agricultural Credit Advisory Committee (ACAC) for the financial year (FY) 2015, which was 28% higher than the actual agri credit disbursement of Rs 391 billion in FY14.
The commercial banks have disbursed Rs 515.9 billion, which is Rs 15.9 billion in excess of the target set for FY15 and 31.8% higher than last year’s disbursements.
Growth was also recorded in the agri outstanding portfolio which stands at Rs 335.2 billion at the end of June, showing an increase of Rs 45 billion (15.5%) compared with the last year position of Rs 290.3 billion.
The agri credit target of Rs 500 billion in FY15 (28% growth) was ambitious by any standards, given the higher risk perception of the banks about agri financing and volatility in the prices of agri produce. Nonetheless, SBP adopted a multi-pronged strategy for achieving the target which included sensitising the banks to adopt agri financing as a viable business line, diversification of agri lending portfolio of banks, increase in per acre credit limits and extending the scope of eligible items, development of new product eco-system including value chain financing, and inclusion of Microfinance and Islamic banks for small and faith sensitive clients.
Further, for deepening agricultural financing outreach, Fast Track Lending Programme was launched during the year for farm and non-farm activities in selected districts of the country. In addition, farmers’ awareness and financial literacy programmes were conducted at grass root levels.
The agricultural credit targets have continuously been surpassed since FY 2011-12 with an average growth of 10.8% as compared with 3% growth in agriculture GDP for the same period.
In addition, to achieving the indicative agri credit target, SBP implemented all the budgetary initiatives and projects in collaboration with banks during the year. These include enhancement of the scope of crop loan insurance up to 25 acres, rollout of livestock insurance for small farmers, launch of credit guarantee scheme for small and marginalized farmers, introduction of warehouse receipts financing and loans for solar tube-wells.
A detailed review of banks’ performance for 2014-15 reveals that five major banks collectively disbursed agri loans of Rs 262.9 billion or 104.1% of their annual target of Rs 252.5 billion, which is higher by 34.5% from Rs 195.5 billion disbursed during the corresponding period last year.
Amongst the five major banks, Habib Bank Limited (HBL) has achieved 113 % of its annual target, Muslim Commercial Bank (MVB) achieved 102.6%, United Bank Limited (UBL) 101.4%, Allied Bank Limited (ABL) 101.2% and National Bank of Pakistan (NBP) achieved 100.1 % of its individual annual target.
Among specialised banks, Zarai Taraqiati Bank Limited (ZTBL) disbursed Rs 95.8 billion or 106.5% of its annual target of Rs 90.0 billion while Punjab Provincial Cooperative Bank Limited (PPCBL) has disbursed Rs 10.5 billion achieving 91.2% against its target of Rs 11.5 billion during FY15.
Fifteen domestic private banks, as a group, achieved 94.1% of its target. Within this group, Faysal bank, Bank Alfalah, JS bank, Bank of Khyber, Bank of Punjab and Standard Chartered Bank were the top performers, surpassing their allocated annual targets. However, Summit bank achieved 99.6%, Habib Metropolitan 96.2%, Askari 86%, Soneri bank 85.8%, NIB 85.3%, Sindh bank 80.9%, Bank Al-Habib 72.1% whereas Silk bank could only achieve 63.1% of their individual annual targets.
Eight Microfinance banks, as a group, have surpassed their annual targets of Rs 28.2 billion by disbursing agri loans of Rs 33 billion achieving 117% of the allocated targets during FY15.
Khushhali, First Microfinance bank, Tameer, Pak Oman, Waseela and U Microfinance bank have surpassed their targets while NRSP Microfinance bank could only manage 92.3% of its annual target.
Four Islamic banks, as a group, also posed impressive disbursement figures exceeding their annual targets by disbursing Rs 5 billion against the target of Rs 2.3 billion. Among the group, Bankislami, Meezan and Albaraka Bank
have surpassed their annual targets for FY15.
Courtesy www.dailytimes.com.pk