Assessing the Challenges and Impact of Access to Agricultural Credit in Southern Punjab (Pakistan): A Qualitative Study

Abstract

Pakistan's agriculture industry, distinguished by its variety of animals and crops, has historically been the foundation of the country's economy. It contributes significantly to GDP, employs a considerable section of the people, and assures food security for the country. Despite its vast potential, the agricultural sector continues to struggle with issues including low productivity, susceptibility to climate change, and inadequate access to financial resources. Investigating the Credit Barriers to Bank Lending in Pakistan's Agriculture Sector was the aim of this study. The effectiveness of present lending processes, as well as the role of banks in providing credit to agricultural consumers, and the socioeconomic implications of bank credit in agriculture, were also explored. In-depth semi-structured interviews were the primary technique of data collecting for this study, which followed a qualitative research design. A total of 33 representatives from the NRSP Micro Finance Bank, Zari Tarraqiati Bank Ltd., and National Bank of Pakistan (NBP) in the Bahawalpur region, as well as some of the bank's visiting clientele, were the participants of the study. Data was extracted and analyzed using thematic analysis to reveal recurring themes and trends. According to the findings, banks in Pakistan encountered some credit challenges when offering loans to the farm industry. There were societal issues, knowledge gaps, legal constraints, and financial challenges. Stakeholder perspectives, including those of bank employees and farmers, provided a thorough picture of the problems at hand. This research contributes to the literature by offering an in-depth analysis of credit restrictions in agricultural financing in Pakistan.