Farm loans issued by ADBL up over two-fold to Rs 8 billion

KATHMANDU, AUG 28 -

The Department of Agriculture has said that lending by the state-owned Agricultural Development Bank Limited (ADBL) to the farm sector jumped 111 percent to Rs 8.37 billion in the last fiscal year. The bank issued credit worth Rs 3.96 billion to the sector in the previous fiscal.

The loans issued to the agriculture sector make up 16.81 percent of its total lending. The bank’s total lending was Rs 49.77 billion in the last fiscal year, according to its fourth quarterly financial report.

Nepal Rastra Bank has asked commercial banks to maintain their lending to agriculture and hydropower at 12 percent of the total lending in the next three years.

According to Lilaram Poudel, director general of the Department of Agriculture, 55,833 farmers borrowed money from banks in the last fiscal year. The number of borrowers was 54, 953 in the previous fiscal.

With the increased number of borrowers, average banking transactions have also doubled in the last two years. Poudel said that on average farmers made 72,152 banking transactions in the previous fiscal, which soared to 149,583 transactions in the last fiscal.

“An increase in banking transactions is a positive sign for the agriculture sector,” Poudel said, adding that the central bank’s order to direct a certain percentage of their loans to the agriculture sector had increased the number of borrowers.  

The department said that youths returning from foreign jobs made up the largest number of loan recipients. “We have estimated that big amounts have been made in commercial vegetable farming, fishery and tea and coffee.” There were more borrowers in floriculture too.

The statistics of the department show that largest investments have been made in agriculture services.

The stats show that 16,256 farmers borrowed Rs 5.15 billion for agriculture services. The second highest amount of loans went to vegetable production. Around 23,437 farmers borrowed Rs 2.12 billion for vegetable production.

Fishery is the third sector. Around 926 farmers borrowed Rs 398 million to invest in fishery. In the cereal crops sector, credit worth around Rs 267 million was issued. Cash crops, horticulture and tea and coffee are the other areas to which loans were issued.

The department’s statistics does not include loans taken from private banks. It also does not include loans that went to livestock farming. The Central Region is the highest recipient of loans in the agriculture sector followed by the Mid-Western, Western, Eastern and Far Western development regions.

Source: The Kathmandu Post