Banks provide record loans
ISLAMABAD: In FY23, Pakistani banks provided record loans to farmers to boost agricultural output. The banks disbursed a total of Rs1.776 trillion in loans to farmers in the last fiscal year.
This achievement represents 97.6% of the target the State Bank of Pakistan had set for 2022-23. The State Bank of Pakistan reported this development on Wednesday through a press release.
Banks provide record loans to farmers in FY23.
This marked a substantial increase of over 25% compared to the preceding year’s disbursement of Rs1.419 trillion.
Furthermore, the outstanding agriculture credit portfolio experienced a growth of 10%. It reached Rs760 billion by the end of June 2023, from Rs691 billion in 2021-22.
This exceptional performance in FY23 is an outcome of the collaborative endeavors of financial institutions.
Meanwhile, initiatives implemented in response to several challenges, including the devastating floods of 2022, and escalating costs encouraged lending.
Notably, SBP’s Champion Bank Model and Agriculture Credit Scoring Model played pivotal roles. It assisted financial institutions in extending agriculture financing. The banks focused on underserved regions where a significant growth was observed in FY23.
Additionally, strategic guidance from the Agricultural Credit Advisory Committee (ACAC) also expedited agricultural lending.
The Prime Minister’s Kissan Package also boosted agricultural financing flow, especially in flood-affected areas.
Under the Kissan Package, banks waived markup on outstanding small loans, offered interest-free loans to small and marginalized farmers. The banks also provided risk coverage for banks.
The SBP also released the annual ranking of banks under the Agriculture Credit Scoring Model. This scoring model assesses banks’ agriculture credit performance based on a multi-dimensional criterion, with a specific focus on regional and sectoral performance.
