KARACHI: The State Bank of Pakistan (SBP) on Friday set a slightly higher Rs1,800 billion farm lending goal for 2022–2023 in light of the extensive harm to agriculture caused by enormous floods brought on by historic monsoon rains.
The Rs1,700bn objective was missed last year primarily as a result of the conservative lending practises of financial institutions.
The current year has been under a great deal of stress as a result of devastating flash floods that occurred across the country. Even though there are no official numbers available about the loss of animals, crops, and other valuables connected to agriculture, a brokerage house first estimated the total loss at Rs. 900 billion.
Due to capacity constraints, it is challenging for brokerage firms or independent NGOs to estimate potential losses; only the government can offer information on the precise damages suffered.
To assist the farming community in obtaining appropriate financing from banks and maximising the use of their agricultural inputs, the per acre indicative credit ceilings for agriculture financing have also been enhanced.
In response to the wheat scarcity, credit for wheat has increased this year by 40% per acre.The cost of importing 2 million tonnes of wheat is anticipated to be $1.7 billion.The agricultural industry obviously needs a lot more funding to recover from the significant losses brought on by the natural disaster.
In order to meet the demand for agricultural credit, the SBP has set a fiscal year 2019 target for banking institutions of Rs1.8 trillion in annual agriculture loan disbursement.
Additionally, special targets of Rs140 billion for development loans of the cereal crop, Rs45 billion for tractor finance, and Rs20 billion for harvesters and planters are included in the total aim for FY23., and other farm machinery have also been set in accordance with the needs for national food security and the mechanisation of farms to increase agriculture productivity, according to the central bank