Kanwal Naseer

Easy access to credit finance enables farmers and companies to adopt new technologies and diversify the agriculture industry. However, it has risen as a huge challenge in Pakistan due to the bank documentation that is not only lengthy, but also unintelligible to the illiterate or less-educated farmers, reports WealthPK. Ghulam Rafique, a farmer, told WealthPK that it generally takes so long for the loans to be approved and disbursed that the farmers who rely on bank loans are unable to develop their crops, as the season gets lost. “Inordinate delay on the part of banks is a serious problem.

The banks require a lengthy documentation, making the procedure time-consuming. The bank officials do not provide the farmers with detailed information. They do not guide the farmers properly about the procedure to get loans easily and repay them. They also keep the common farmers in the dark about the terms and conditions [of loan repayment],’’ said Ghulam Rafique. According to WealthPK, the agriculture sector in Pakistan is mostly unproductive, as the farmers lack financial means to implement the latest agricultural practices needed to increase productivity.

There is a big gap in equality in the disbursement of agriculture credit in the four provinces of Pakistan. A major chunk of agriculture credit is disbursed in Punjab, while the rest of provinces receive a nominal share. In Pakistan, banking infrastructure is still mainly concentrated in the urban areas. Considering the urban population as their key clients, the banks usually focus on opening new branches in the urban areas. For small farmers, who are less mobile, it is difficult to visit the bank branches located in urban or semi-urban areas. The loan process is overly complicated due to which the farmers don’t get loans in time for input purchases. Some farmers obtain loans on high interest rates and in some cases they have to sell their land to repay the loan.

The lengthy procedure for loan approval at the State Bank of Pakistan and all other banks, including the Zari Taraqiati Bank, has to be reviewed. There is a need to make the process as simple as possible. It is important, especially in the case of agriculture financing, because a lengthy process takes time and in many cases the farmers miss the season due to delay in the disbursement of loan. Last but not the least, illiterate or less educated farmers are unable to follow the difficult bank procedure. There is also a need to assist and finance clever farmers who employ technology-based farming. They may eventually bring greater outcomes to the government.

Credit : Independent News Pakistan-WealthPk