Open AccessFarm Loans Recovery Problem in Pakistan: Its Possible Solution
Author(s) -
Rao Abdul Rauf Khan
Publication year - 1994
Publication title -
pakistan development review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.154
H-Index - 26
ISSN - 0030-9729
DOI - 10.30541/v33i4iipp.837-843
Subject(s) - setback , agriculture , productivity , business , welfare , government (linguistics) , production (economics) , finance , contract farming , financial system , economics , economic policy , economic growth , market economy , ecology , linguistics , philosophy , civil engineering , macroeconomics , engineering , biology
The emerging trend of focussing more and more attention onimproving the production and productivity of farming in Pakistan hasprompted bankers to evolve better schemes to improve the incomegeneration capacity of the farming community and help them repay theborrowed funds in time. This can be called a step in the rightdirection. The Agriculture Development Bank of Pakistan (ADBP) theFederal Bank for Cooperatives (FBC) and the Commercial Banks are themajor formal institutions, which because being Government owned have infact become the agents for rural development purveying the mostimportant input i.e. credit. Hence, the expansion and growth of thebanking sector have become synonymous with national welfare. The mainobjective of banks in lending is to improve the recycling of fundscapability borrowed from the public or raised from internal or externalsources for the benefit of society. The recovery of loans portrays adismal picture. Since agricultural lending expanded extensively, therecovery percentage has received a great setback due to which as perestimate more than half of the funds are not funnelled back. In fact,financial distress has always been a feature of the financial scene butmost of the time it has been associated with being a sectoral problemsuch as those affecting agriculture and industries.