DISBURSEMENT OF AGRICULTURAL LOANS, CONSTRAINTS AND IT’S FUTURE POLICY IMPLICATION

This article is based on primary data collected and collated in June-August 2007 for disbursement of agricultural loans and factors constraining its availability to farmers. The universe of the study consisted of the whole Khyber Pukhtunkhwa. Multistage sampling method was used to select a required sample. Four districts were randomly selected and 291 respondents were interviewed. The selected respondents were grouped into three categories namely small (146), medium (81) and large (64). It is concluded that majority of the small farmers are deprived of getting loans, because almost all the financial institutions extend loans on grantee and capacity/ ability to repay. In other words larger is the farm size more are the chances of access to loans. Access to loans by small farmers was badly hampered by lack of grantee, high rate of interest, complicated procedure, and religious reasons etc. Making credit available and ensuring its productive use should therefore form the basic planks of any credit policy to foster agricultural productivity.