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Rural Finance in Pakistan

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Rural Finance in Pakistan - PowerPoint PPT Presentation

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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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Presentation Transcript

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

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.

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.

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.

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 Loans Maximum 6 Months
    • For Small Business: Maximum 2 Years







Security Requirements

  • Two Guarantors
  • Jointly Group Liability
  • Post dated Cheque
  • Having immovable property barred with Revenue Department.
  • Affidavit from each member.

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.

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.

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.

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 Bags Urea: 4988 Bags
      • SSP 80 Bags Potash: 22 Bags
      • Diesel: 3808 Liter Weedicides: 38 Liter

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

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

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

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.

Thank you

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