Islamabad: The State Bank of Pakistan (SBP) said on Monday that credit disbursement to the agriculture sector climbed to Rs1.366 trillion in FY21, up 12 percent from FY20; nevertheless, it fell short of the objective of Rs1.5 trillion.

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According to the central bank’s announcement, the number of agricultural credit borrowers fell by 5%, from 3.7 million in FY20 to 3.5 million in FY21, owing to pandemic-induced limited outreach.

According to the SBP, the payout was made possible by the combined efforts of 49 financial institutions, which achieved 91 percent of their annual target of Rs1.5 trillion.

It stated that outstanding agricultural credit stood at Rs628 billion as of June 30, up over 8% year on year, adding to the overall good outlook of the agriculture sector, which increased at 2.77 percent in FY21. Commercial, specialized, and Islamic banks performed better in FY21, disbursing Rs1.21 trillion against a target of Rs1.27 trillion, attaining 95 percent of their allotted disbursement objective.

Microfinance banks, on the other hand, met 73 percent of their aim by disbursing Rs132 billion in agricultural loans to small farmers.

Microfinance banks and rural support programs combined disbursed Rs23 billion to small and marginalized farmers, achieving 57% of their aim.

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The SBP permitted banks to grant principal deferment and restructuring of agriculture loans in addition to lowering the policy rate by 625 basis points to help mitigate economic disruptions.

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