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Banks disbursed Rs1215b to agriculture sector amid COVID-19: SBP

Banks disbursed Rs1215b to agriculture sector amid COVID-19: SBP

KARACHI: State Bank of Pakistan (SBP) shared that banks disbursed Rs 1,215 billion to the agriculture sector during the previous fiscal year 2019-20 amid COVID-19 pandemic.

This is 3.5 percent higher than the amount disbursed in the previous fiscal year but less than the credit target of Rs 1,350 billion which was set by Agricultural Credit Advisory Committee (ACAC), the SBP press release said.

Some factors which have constrained the growth of agriculture credit include the impact of COVID-19 pandemic, locust attack and continuing real side issues including water shortage, low production of cotton, sugarcane, low off-take of fertilizers and volatility in prices of agriculture products, the SBP release highlighted.

The outstanding portfolio of agriculture credit increased to Rs 581 billion at end June 2020, registering a growth of 3.3% compared with the last year’s position of Rs 562 billion. However, the number of agriculture borrowers declined from 4.01 million at end June 2019 to 3.74 million at end June 2020 due to the COVID-19 lockdown situation in the country.

The analysis of disbursement reveals that during FY 2019-20, five major commercial banks collectively disbursed agriculture loans of Rs 708.3 billion or 100.5% of their annual target of Rs 705 billion, specialized banks disbursed Rs 71.1 billion or 62.9% of their annual target of Rs 113 billion and fourteen domestic private banks as a group achieved 88.7% by disbursing Rs 225.0 billion against their target of Rs 253.6 billion.

It is pertinent to mention that SBP announced a comprehensive relief package for agriculture sector including deferment of principal and restructuring or rescheduling of agriculture loans.