Agricultural credit surges 21.4% to Rs2.79 trillion in FY26, but outreach to smaller farmers narrows

Profit, citing a State Bank of Pakistan performance overview released on Thursday, reports that agricultural credit disbursements reached Rs2.79 trillion in July-May of FY2025-26, a 21.4% jump from a year earlier. Commercial banks did most of the lending, advancing Rs2.41 trillion over 11 months, which is 22.3% above the Rs1.97 trillion recorded in the prior year. The outstanding stock of farm credit grew 27.1% to Rs1.182 trillion by end-May 2026, with commercial banks holding Rs708.3 billion of it.

Mid-sized banks posted the steepest rise, with disbursements up 64.8% to Rs809.4 billion. Bank Al-Habib, Bank of Punjab and JS Bank accounted for Rs233 billion, Rs189.3 billion and Rs34.4 billion respectively, with Al-Habib's lending increasing 126%. Islamic lenders grew more slowly, lifting disbursements 12.4% to Rs216.4 billion, of which Meezan Bank contributed Rs125.1 billion, up 25.9%, while Faysal Bank rose 11.3% to Rs37.5 billion.

Borrower numbers moved in different directions, with commercial bank borrowers almost doubling to 1.21 million, up 96.3%, while total outstanding agricultural borrowers rose 14.7% to nearly 2.98 million. Microfinance banks, however, saw borrowers slip 17.7% to around 976,800 even as their disbursements climbed 13.4% to Rs258.2 billion. Microfinance institutions and Rural Support Programmes together lent Rs27.4 billion, up 4.9%, yet their borrower count fell 13% to 353,674 from 406,650, a pattern that signals narrower reach for smaller farmers.