Micro-credit

Considerable work has been done at governmental and NGO level to enhance accessibility of easy and cheap institutional credit to women. Since women lack in assets ownership, there was the need for a specialised financial institution which could cater to credit needs of micro business owners without asking for conventional tangible collaterals First step in this regard was the establishment of First Women Bank which from its very inception has been launching micro-credit schemes for women from low income groups both in urban and rural sectors. Apart from disbursing credit, for developing and updating entrepreneurial skills among

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women, the bank conducts entrepreneurial skill development training programmes all over the country. How did the NAbenefit from it is not known?

Agriculture Development Bank has also come forward to finance micro businesses of women and for that they have set up special windows in their designated branches to look into credit needs of women. Some major NGOs like Orangi Pilot Project and Aga Khan Rural Support Programme apart from doing community development work in the areas of education, health and population planning have major focus on economic empowerment of women. They have their own credit disbursement programmes.

The establishment of the Khushhali Bank is a major break through in this regard as it is exclusively meant for financing micro businesses through loans of very small magnitude secured against communal guarantee only. Apart from above notable NGOs, a large number of NGOs are doing good work in other provinces, these are National Rural Support Programme and Sarhad Rural Support Programme that are associated in credit disbursement programmes of Nationalised Commercial Banks as self-help groups and facilitators. Similar arrangements could be made/initiated in NA. The banks in order to cut down the transaction cost of micro loans and for making credit available at the doorstep of small borrowers induct such NGOs as an intermediary between bank and clusters of communities. These steps on the part of financial institutions, related government departments and of course motivational role of NGOs have enabled the women to go into business and contribute towards growth of the economy. The economic empowerment thus created has given women self-confidence and a sense of achievement.

The country now being signatory to CEDAW (Convention on the elimination of Discrimination against Women) is gradually taking all affirmative steps to eliminate gender disparity and to enhance women’s participation in all walks of life. Things are likely to change in NA, as well.

2.17.1. Agricultural Development Bank of Pakistan (ADBP) in NA

Agricultural Development Bank of Pakistan has been playing a very significant role in the development of agriculture and socio-economic conditions of rural poor and neglected farming community of Northern Areas since 1970 . It has a set up of 5 branches , at Gilgit, Aliabad , Gahkuch, Chilas and Skardu, 4 field offices at Astore, Gupis, Gojal and Khaplu besides 24 Mobile Credit officers. In the mean time ADBP provides loans in 220 Loanable schemes on off as well as on farm activities. It provides loans on short, medium and long term bases, with 14% and 16% mark up.

Apart from the above ADBP has also taken up the responsibility and introduced micro credit scheme under poverty alleviation programme for landless skilled female and male of the area. So far bank has been able to disburse an amount of Rs.160.000 million under micro credit scheme, which certainly pro v i d e d tremendous self employment opportunities to both the rural and urban population.

P re s e n t l y, A D B P has been allocated Rs.250.000 million for disbursement in Northern Areas during the FY 2001-2002, for development of agriculture sector as well as poverty alleviation. Further details are presented in tables.

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Table 66: Tractors financed by ADBP

Years Number of Tractors Amount Disbursed (million Rs.)

FY' 1986 101 9.932

Table 67: Agricultural credit disbursement by major purposes (Rupees in million) Purposes 1999-00 1998-99 1997-98 1996-97 1995-96 1994-95 1993-94 1992-93 Development 111.288 154.872 134.968 58.365 43.965 102.382 64.184 59.180 loans

Tractors 9.628 7.730 0.000 0.702 6.395 0.681 1.720 5.578 Farm equipment 3.171 5.760 11.926 0.426 0.208 0.576 0.631 1.506 Dairy farming 28.656 35.090 28.039 22.965 16.078 42.414 21.884 14.003 Livestock 19.369 24.118 19.168 8.933 6.585 14.412 9.897 11.450 Tubewells 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Orchards 11.616 15.108 9.090 4.306 0.804 8.830 7.156 6.318 Poultry farming 0.474 1.858 1.418 1.439 0.750 2.398 0.426 0.714 Land development 0.038 0.407 0.373 0.444 0.771 2.110 0.221 0.270

Farm 0.000 0.000 0.000 0.000 0.000 0.000 0.000 1.316

Transportation

Fisheries 0.008 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Draught animal 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Others 46.331 64.801 64.954 19.150 12.374 30.961 22.249 18.005 Production loans 1.463 2.866 4.126 2.599 1.564 5.253 3.311 2.435 Fertilizers 0.093 0.336 0.405 0.318 0.019 0.571 0.368 0.138 Pesticides 0.007 0.033 0.046 0.001 0.001 0.006 0.001 0.000

Seeds 0.125 0.563 0.318 0.263 0.017 0.513 0.151 0.203

Working capital for 0.536 0.719 0.887 0.819 0.471 0.929 0.483 0.095 poultry farming

Working capital 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 for dairy farming

Working capital 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 for livestock

Working capital 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 for fisheries

Others 0.702 1.215 2.470 1.198 1.056 3.234 2.308 1.999

Total 112.751 157.738 139.094 60.964 45.529 107.635 67.495 61.595

m The existing levels of loans for the development of uncultivated land are insufficient to meet the expenses even for one kanal. Thus it is suggested that at least Rs. 100000/= be fixed for NA farmers community. NA has a great potential for food, fruits and other high value cash crops, medicinal plants, etc.

But the farmers are very poor to adopt new options and technologies due to lack of financial resources. Thus majority of the farmers are reluctant to obtain the loans due to high interest rate.

m Keeping in view the backwardness, remoteness and potential of the area special concession in the interest rate may be granted to the progressive farmers of the NAfor prosperity of the nation.

m The existing credit ceiling for establishment of fish farms, etc is Rs. 50000/- per acre, while the land holdings in NA are only 1-2 kanals, which does not make the most people eligible for grant of loan. The amount of loan does not fulfil the requirement for the establishment of fish farm. Thus it is suggested that Rs.40000/- per kanal may be fixed for granting loan.

m Strong linkages are needed between key stakeholders, registered progressive farmers, association for utilization of credit facility for commercial farming.

m There is a strong need for strengthening existing capacity of the bank by inducting agricultural graduates as MCOs, etc.