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Agriculture sector surpasses historic Rs 1 trillion

Muhammad Sudhir Chaudhry Deputy Bureau Chief Lahore

20th Nov, 2019. 12:13 am
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state bank

Governor State Bank of Pakistan, Dr. Reza Baqir, appreciated the banks for their efforts in increasing the bank credit to the agriculture sector, which reached its historical high by end of FY19. ‘It is for the first time in Pakistan’s history that credit to the agriculture sector has surpassed one trillion rupees,’ said the Governor in his keynote address. He was chairing the annual meeting of the Agricultural Credit Advisory Committee (ACAC) held in Peshawar, KPK as part of SBPs continued efforts to enhance agriculture credit in the underserved provinces and regions.

Dr. Baqir, however, urged the banks to enhance their efforts to achieve qualitative aspects of the assigned targets as well in line with the strategic shift and key policy actions taken by SBP regarding agricultural financing.

He highlighted that most of the banks met their assigned targets except for some of the banks including ZTBL, PPCBL, some of the domestic private banks and Islamic banks falling short of achieving their targets.

The province wise agriculture credit disbursement witnessed double-digit growth across all provinces and regions; however, banks struggled to achieve their assigned targets in the underserved regions.

He urged agriculture lending banks and institutions to scale up their efforts and commitment to ensure achievement of agriculture credit target in the underserved provinces and regions.

The Governor apprised the committee that SBP is considering three policy actions to further promote financial inclusion in the agriculture sector.

First, enhancing transparency through disclosure of bank wise performance statistics on monthly basis covering agriculture credit disbursement, geographic distribution, outstanding amount, number of borrowers, and agriculture credit infrastructure.

Second, introducing a comprehensive scoring model for ranking of banks against key agriculture credit indicators and targets.

Third, introducing incentives and penalties based on performance scores of banks. Dr. Baqir emphasized that there is a large scope for lending opportunities for banks that support both financial inclusion and banks’ profitability.

The Committee also deliberated on the new directions in agricultural financing by focusing on technology especially digitalization of agriculture loan processes through adoption of Land Record Information Systems, Electronic Warehouse Receipt Financing system, and landmark initiatives like Kissan Digital Portal, which are key priorities under the National Financial Inclusion Strategy 2023.

The meeting was attended by senior officials of federal & provincial governments, Presidents/CEOs of banks, members of all provincial chambers of agriculture, progressive farmers, representatives of KPK farming community and SBP officials.

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