Details

Technical Note

Educator Copy

Agricultural Credit in Pakistan

Ramsha Naeem, Hafsa Ashfaq, Fazal Jawad Seyyed, Choudhry Tanveer Shehzad


INDUSTRY : Banking, Agriculture

AREA : Agribusiness

ORGANIZATION : Pakistan

LENGTH : 29

LUMS No : 13-104-2015-2

PUBLICATION YEAR : 2015

DESCRIPTION

KEYWORDS:

Agricultural Sector,Agirculture,GDP,Pakistan,Agribusiness,Farming,Management,Agricultural Credit,Financing,Financial Statements,Agricultural Credit Data


DESCRIPTION:

The technical note on Agricultural Credit in Pakistan attempts to provide an overview of the agricultural credit situation in the country. Pakistan is an agricultural country and agriculture contributes 21.4 percent to Gross Domestic Product (GDP), employs 45 percent of the labour force and makes a major contribution to other sectors of the economy. The performance of the agricultural sector of Pakistan is poor as compared to developed countries due to lack of proper technology, techniques regarding crop management, availability of water, increase in production cost and inadequate supply of credit. A majority of the Pakistani farmers are subsistence farmers who are unable to use high quality seeds, fertilisers, and other inputs due to the non-availability of adequate credit which is one of the major reasons for low productivity in the agriculture sector. The technical note starts with an overview of the agricultural credit market in Pakistan including its historical background and the current status of agricultural credit in the overall economy along with a discussion of the regulatory framework established by the State Bank of Pakistan (SBP). In the latter sections, it covers the formal and informal sources of agricultural credit and discusses the breakdown of agricultural credit data, major impediments to growth in agricultural credit, and the key initiatives to increase flow of credit to the agricultural sector.


LEARNING OBJECTIVES:

1) Comparison of agricultural credit with total private credit. 2) Overview of the regulatory environment of agricultural credit. 3) Formal and informal sources of agricultural credit. 4) Breakdown and analysis of agricultural credit disbursement including the recovery of loans. 5) Key issues hindering the growth of agricultural credit in Pakistan. 6) Initiatives taken by the State Bank of Pakistan (SBP) to develop the agricultural credit markets.


SUBJECTS COVERED:

Finance, Management, Agriculture, Accounting, Business