Financial Support of Small Farmers
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Rural Finance in Pakistan - PowerPoint PPT Presentation


This presentation is about Financial Support of small farmers in Pakistan to reduce poverty nad ensure food security under National Program of Food Security & Productivity Enhancement of Small farmers (Crop Maximization Project-II) Agriculture Department, Government of Pakistan.

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Rural Finance in Pakistan

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Financial Support of Small Farmers


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Competitive Features

  • Credit needs of the farmers at their doorsteps.

  • Efficient, fastest and cheaper lending procedure.

  • Simplified documentation.

  • Timely disbursement.

  • Transparent services.

  • Focus on small farmers.

  • Lowest Mark Up

  • Provision of Timely Inputs

  • Packaging credit with technology and appropriate marketing of inputs and outputs.

  • Mobile Banking


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Defining Target Clientele

Small Farmers:

  • Having land less than 20 Acres.

  • Actually cultivating land i.e owners/tenants

  • Socially excluded

  • Geographically disenfranchised

  • Away from socio-economic centers

  • Live in calamity - prone areas.


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Conceptualizing Village Organization


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Financing Policy & Procedure

  • Who Can Borrow?

    Only members of registered VO can borrow.

  • Documents Required?

    • Loan Application Form

    • Guarantee of Two Members

    • Post dated Cheque of any commercial bank.

    • Affidavit stating timely recovery of loans.

    • CNIC copy and photograph.

  • LOAN IS ISSUED IN THE FORM OF INPUTS ONLY


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    Financing Policy & Procedure …..

    • Procedure:

      • Loan applications are submitted to VO secretary.

      • Credit committees make technical and social assessment of loanees.

      • VO Secretary calls a meeting of executive body, in which loans are approved in the Presence of Credit Officer and Agriculture Officer concerned.

      • Purchases of inputs demanded in loan applications is made from the market at the lowest price ensuring collective marketing benefit.

      • VO also secures a pro-note and resolution from executive members before the issuance of check.


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    Financing Policy & Procedure …..

    • Service Charges

      10 % per annum

    • Credit Limit:

      • For Kharif Crops: Rs. 8000/ Acre

      • For Rabi Crops: Rs: 6000/Acre

    • Loan Time Period

      • For Production LoansMaximum 6 Months

      • For Small Business:Maximum 2 Years


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    A

    F

    B

    E

    C

    D

    Security Requirements

    • Two Guarantors

    • Jointly Group Liability

    • Post dated Cheque

    • Having immovable property barred with Revenue Department.

    • Affidavit from each member.


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    Measures for Recovery

    • Proper Follow Up

    • Periodical Loan Recall

    • Discount in service charges for Early Recovery

    • Acceleration of repayment from guarantor

    • Legal proceedings under cooperative Act.

    • Help from Revenue Department.


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    Establishment of Revolving Fund

    • Targets

    • Achievements

    • Establishment of Revolving Fund ( 2 – 4 million) in each project village, for production loans.

    • Funds for Small Business/IDIs @ 10 IDI’s per Village.

    • Matching grant against VO savings for establishing SFBC.

    • 80% grant for purchase of implements at village level.

    • 18 VOs have partially received revolving fund amounting Rs. 14.33 Million

    • Only two VO’s have got partial grant for the establishment of implements.


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    Progress Review of Financing

    Revolving Fund

    Special Saving

    • Production loans amounting Rs. 9,689,038/- has been disbursed for Rabi 2010-11 benefiting 373 members of 15 VOs.

    • 100 % recovery was made on production loans for Kharif 2010 of Rs. 8,550,702/-.

    • A profit of Rs. 348,000/- was earned as services charges on loan issued for Kharif crop.

    • An amount of Rs. 240,000/- has been collected as share money from 2390 members of 55 VOs.

    • Eight VOs have invested their share money amounting in Small Farmer Business Center.


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    Outreach (Rabi 2010-11)

    • Total loan disbursed: Rs. 9,689,038/-

    • Total members Benefited:373

    • Total VOs covered: 15

    • Total area for which loan issued:1900 Acres

    • Recovery Date: 15 May 2011

    • Amount Recovered:Rs. 98050/-

    • Inputs Provided:

      • DAP 1427 BagsUrea:4988 Bags

      • SSP 80 BagsPotash:22 Bags

      • Diesel:3808 LiterWeedicides: 38 Liter


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    Record Keeping

    • All VOs are liable to maintain record as per cooperative Act 1925 that includes Cash Book, Ledger Book, Minutes of Meeting Register, Membership Register, Stock Register, Bank receipts etc.

    • VO office bearers have been provided trainings for record keeping.

    • All necessary guidance is provided to VO office bearers to maintain record properly


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    Extra Credit Services

    • Our Service is Beyond Savings and Loan.

    • Develop First Then Follow By Loan.

    • Assist farmers facing occupational problems

    • Re-lending to members

    • How to reduce cost of production, Living expenses, Farming tools & techniques.

    • How to improve farming productivity etc.

    • Farmers’ Coaching and Training


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    Lessons Learnt from Experience

    • Issuance of loans on need basis only.

    • Linkages with Stakeholders

    • Close Liaison with Farming Community

    • Guidance to the Farmers/ Borrowers

    • Training & Awareness

    • Rural Deposit Mobilization and Fund Based Services


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    State of Affairs

    • Funds are not provided as promised to the farmers which creates anarchy among them.

    • Per acre credit limit needs to be enhanced keeping in view the input prices.

    • Diesel may also be treated as input and loans may be issued for purchase of diesel also.

    • Sugarcane is the major crop of most project villages so loans for sugarcane crop may also be initiated.

    • As per agreement NBP has not yet calculated any profit on the amounts deposited into VO accounts despite of several written communications.


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    Thank you

    M. Irfan ArshadCell No: +92(300) 6732379, Credit & VO Help Officer, Rahim Yar Khan


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