ISLAMABAD : August 27, 2022. The State Bank of Pakistan (SBP) has set agriculture credit disbursement target of Rs1.8 trillion for FY23
State Bank of Pakistan (SBP) has assigned annual agriculture credit disbursement target of R$1,800
billion to the financial institutions for FY23 to cater to the agriculture credit demand in the country.
in line with the national food security requirements and need for mechanization of farms to enhance agriculture productivity, specific targets of RISLs140 billion for production loans of wheat crop,
R545 billion for tractor financing, and R$20 billion for financing for harvesters, planters and other farm
machinery have also been set under the overall target for FY23. In addition,
SBP has also enhanced the
per acre indicative credit limits for agriculture financing to support the farming community to avail
adequate financing from banks and optimize their agriculture inputs’ usage. With a view to ensure food
security, per acre indicative credit limit for wheat has been enhanced from existine Rs60.000 to
R$100,000 which will allow farmers to deploy quality inputs for improved yields.
During FY22, the financial institutions managed to disburse R51,419 billion to the agriculture sectoi
compared with the disbursement of Rs1,366 billion during FY21 whereas the outstanding agriculture
credit recorded an encouraging growth of over 10% and reached R5691 billion by end June 2022. The
unprecedented disbursement and growth in agriculture credit portfolio was supported by various
recent initiatives of SBP to promote agriculture credit and financial inclusion in the country.
One of the major recent initiatives of SBP was the introduction of a comprehensive agriculture credit
scoring model to bring focus of banks towards improving qualitative aspects and regional distribution
of agriculture financing in the country. The model, adopted by the Agricultural Credit Advisory
Committee, provides individual scores reflective of each bank’s agriculture credit performance against
a multidimensional criteria based on various indicators including sectoral disbursement, regiona
performance, outstanding amount, and outstanding borrowers etc
Recently, growth in agriculture credit disbursement remained subdued due to various challenges such
as adverse climate change effects, resource constraints in banks, underutilization of approved limits by
borrowers etc., while a few banks, particularly large public sector banks, among others, also performed
slower than usual and struggled to achieve their assigned annual targets.
S89 has also released the annual randne of banks under this scoring model to bring transparency anc
competition among the various agriculture credit providers. As per the model’s results for FY22, HBL
ranked on top among Large Banks with a score of 75.4, Bank of Punjab scored 62.1 and ranked highest
among Mid-Sized Banks, and Bank Islami stood first among Small Banks with a score of 55.7. Further,
U Microfinance Bank ranked the highest among Microfinance Banks with a score of 80.4. Complete
results for FY22 and detailed criteria of the scoring model will be
accessible