lahore - The banking sector has disbursed agri credit of around Rs389 billion in fiscal year 2013-14, surpassing the revised target of Rs380 billion, provisional statistics say.

Governor SBP Ashraf Mahmood Wathra said that SBP has long been making efforts to enhance the flow of credit to agriculture; resultantly, the agricultural disbursements registered steady growth and rose to Rs 333 billion in FY 2012-13 from Rs 169 billion in FY 2006-07 recording an annual growth of over 10 percent.

The revised target for 2013-14 was set at Rs. 380 billion which was rather challenging for both SBP and banks which was however not only met but superseded.

Briefing the annual meeting of the Agricultural Credit Advisory Committee held at SBP, with Finance Minister Ishaque Dar in the chair, Governor SBP Ashraf Mahmood Wathra said the government has a keen interest and high commitment to upgrade this vital sector of the economy, which is essential for achieving the broader national objectives of rapid economic growth and alleviation of poverty.  He announced that central bank has set Agriculture Credit Disbursement Target of Rs500 billion for 2014-15 to facilitate growth in agricultural production.

Referring to the indicative target for 2014-15 of Rs 500 billion assigned by the Government, he expressed that “we, as a banking community, gladly accept it as a challenge and are fully committed to accomplish this ambitious target”. He further elaborated that while SBP has developed a strategy to achieve this target, however, this will require high level of commitment from banks’ Board of Directors and their top management.

The Governor requested the national and provincial government representatives to give their assurance and commitment to provide all kinds of support to the banking industry, especially agriculture lending banks for smooth operations. He also urged upon banks that this is a high time to play a meaningful role in the achievement of national goals of growth and development by channeling adequate financial resources to the agriculture sector.

The Governor also pointed out that the share of banks’ credit to agriculture is around 5.7% of their total advances and the total outreach is to just over 2.15 million borrowers as against 8.3 million farm households in the country. This indicates ample room for enhancement of agriculture portfolio by the banks. Further, according to estimates, only 35 to 40 percent credit requirement of agricultural sector is being met by the formal banking system while the remaining is fulfilled through non-institutional credit sources.

Finance Minister who later joined the occasion said that the key to improving agriculture productivity is access to high yielding inputs and markets and most importantly the access to credit whenever it is needed.

Therefore, keeping in view the vital role of agriculture in ensuring food security, reducing poverty, generating economic growth and complementing the industrialization as most of our industries acquire major input from agriculture sector the government is committed to develop a sustainable & profitable agriculture sector.

 It has been decided to establish a National Food Security Council for this purpose. The council will be responsible for ensuring policy coordination across provinces and relating to productivity improvements, market reforms, value addition and prices that ensure stable incomes for farmers.