85% of ZTBL’s Rs 72 billion agricultural loans went to Punjab in 2024, audit flags unequal distribution

Punjab received 85 percent of Zarai Taraqiati Bank Limited’s (ZTBL) Rs72.02 billion in agricultural loans during 2024,

Islamabad:  Punjab received 85 percent of Zarai Taraqiati Bank Limited’s (ZTBL) Rs72.02 billion in agricultural loans during 2024, while farmers in Sindh, Khyber Pakhtunkhwa, Balochistan, Azad Jammu and Kashmir and Gilgit Baltistan shared the remaining 15 percent, an audit report has revealed. Despite the concern over unequal distribution, the government has not announced an inquiry, with the bank arguing that Punjab’s larger farming population, stronger branch network and easier land record verification explain its higher share of agricultural credit.

The issue was raised by MNA Shahida Rehmani, who asked the Finance Ministry whether the Auditor General of Pakistan had pointed out the unequal distribution of agricultural loans and what steps the government had taken to ensure fair access for farmers across the country.

In its reply in the National Assembly, Finance Minister Muhammad Aurangzeb quoted the audit observation that ZTBL disbursed Rs72,023 million in 2024, of which 85 percent went to Punjab. The remaining 15 percent was shared among the other provinces and regions.

The audit described the allocation as irregular and unjust, warning that the bank’s lending efforts remained concentrated in Punjab and that farmers and low income households elsewhere were being deprived of their fair share.

ZTBL rejected the suggestion that its lending pattern reflected preferential treatment. It said the province wise distribution was based on agricultural activity, the number of eligible farmers, branch availability and the efficiency of loan processing. The bank argued that Punjab’s position as Pakistan’s largest agricultural region naturally creates greater demand for seasonal loans.

However, the bank’s latest figures show that the concentration remains substantial. During the financial year 2025 to 26, ZTBL distributed Rs99.443 billion in agricultural credit, of which Rs83.459 billion, or 83.9 percent, went to Punjab.

Sindh received Rs9.295 billion, representing 9.3 percent of the total. Khyber Pakhtunkhwa received Rs3.891 billion, or 3.9 percent, while Balochistan received only Rs1.1 billion, or 1.1 percent.

Gilgit Baltistan received Rs1.364 billion, representing 1.4 percent, while the Muzaffarabad region received Rs334 million, or 0.3 percent.

The bank said Punjab accounts for around 43 percent of Pakistan’s subsistence farming population, while its attached regional table puts the province’s share of subsistence farmers at 44 percent. It also has 294 of ZTBL’s 501 branches, nearly 59 percent of the network. Sindh has 93 branches, Khyber Pakhtunkhwa 57, Balochistan 34, Gilgit Baltistan 12 and Muzaffarabad 11.

ZTBL further argued that Punjab’s fertile land, larger farming population, multiple crop seasons and computerised land records help increase loan applications and speed up their approval. The Punjab Land Records Authority’s system allows the bank to verify land ownership more quickly, making the lending process easier.

To support its position, the bank pointed to figures for the entire banking sector. In the financial year 2024 to 25, all banks combined provided Rs2.577 trillion in agricultural credit across Pakistan. Punjab received Rs2.045 trillion, or 79 percent, while Sindh received Rs453.359 billion, or 18 percent.

Khyber Pakhtunkhwa received Rs55.246 billion, or 2 percent. Balochistan received Rs9.511 billion, representing 0.4 percent, Azad Jammu and Kashmir received Rs9.917 billion, also 0.4 percent, and Gilgit Baltistan received Rs4.153 billion, or 0.2 percent.

The figures support the bank’s argument that Punjab dominates agricultural lending across the wider banking system. However, they also show the small share going to several regions where farmers may have limited access to formal financing.

The Finance Ministry’s reply did not announce an inquiry into the audit concern. ZTBL maintained that its lending pattern followed the country’s broader agricultural and economic structure and said there was no clear reason to launch a separate review.

On corrective measures, the bank said farmers from all provinces could apply for loans through the Punjab Information Technology Board and National Information Technology Board portals under the Prime Minister’s Youth Business and Agriculture Loan Scheme and the Zarkhez e scheme. Farmers could also apply directly at branches for other loan schemes.

ZTBL said it assesses customer needs, business opportunities and district level potential when planning annual lending. It operates through 501 branches and 31 regional offices, supported by around 1,200 Mobile Credit Officers who provide financial services at farmers’ doorsteps.

The bank said it had disbursed Rs29 billion to 19,000 customers nationwide under the Prime Minister’s Youth Business and Agriculture Loan Scheme, launched in 2022.

It also provides short term loans without collateral through the Zarkhez e Assan Digital Zarai Qarza scheme. Farmers can submit applications from home through a mobile application, and the bank says the facility is open to farmers in every province.

Other measures include loans at subsidised markup rates, mobile banking services and ATMs across the country. The bank also listed shifting branches from unbanked areas to banked areas and business hubs, although its reply did not explain how this move would improve access for farmers in places without banking facilities.

ZTBL said its outstanding loan portfolio had grown in less developed regions, including Balochistan, Azad Jammu and Kashmir and Gilgit Baltistan. However, the reply did not provide figures showing the size of this growth.

The central question remains whether the bank’s current lending pattern gives farmers across Pakistan a fair opportunity to obtain credit. While ZTBL has explained why Punjab receives the largest share, the audit concern and the low allocations to several regions highlight the need for clear evidence that eligible farmers outside Punjab can access agricultural loans on equal terms.