SBP digitizes refinance process of EFS

SBP sets Rs 1.7 trillion agriculture credit target for FY22

By

Karachi: Governor State Bank of Pakistan (SBP) Dr. Reza Baqir Monday lauded banks performance in achieving the unprecedented level of agriculture credit disbursement of Rs1.4 trillion in FY21.

Chairing an annual meeting of Agricultural Credit Advisory Committee (ACAC) in Multan, he appreciated the fact that despite COVID-19 pandemic challenges, collective efforts of 50 financial institutions under ACAC guidance helped achieve 91% of assigned target, according to a news release.

In his inaugural speech, Dr. Reza Baqir emphasized that banks leadership could now take this journey to the next level of qualitative improvement in agriculture credit in line with the strategic shift and key policy actions taken by SBP.

Announcing current year’s agriculture credit target of Rs 1.7 trillion with 5 million borrowers, the Governor marked the insistent need to address quality of credit, its geographical imbalances and uneven distribution amongst different categories of borrowers.

On this occasion, the President of SBP announced two new measures to help promote agricultural financing. The first is a comprehensive scoring model, which ranks banks according to key indicators and targets of agricultural credit. In order to create a competitive environment, banks that perform well will receive the recognition they deserve, while banks that perform poorly will be strongly encouraged to focus on indicators that need improvement. The second measure appoints banks to voluntarily serve as champion/lead banks for default/regional under-serving.

Further steps in this regard include establishing help desks in under served areas to facilitate farmers, and launching targeted and collaborative awareness drives for an extensive outreach. He concluded that SBP’s vision will serve two-fold purposes; enhancing farmers financial inclusion while providing more lending opportunities to the banks.

Upon convening ACAC meeting in Multan, the Governor especially highlighted the immense agricultural potential of the area and the opportunities in expanding agriculture finance. This was followed by a presentation on the performance of banks in agricultural financing. ACAC deliberated on the new directions in agricultural financing, particularly the climate smart agriculture practices and the role that financial institutions can play.

Moreover, the Committee also discussed avenues to enhance efficiency of existing agriculture credit infrastructure across the country. In the second session of ACAC, new and innovative ideas were presented by selected banks and other stakeholders in the area of i) value chain solutions, ii) electronic warehouse receipt financing, iii) digital loan origination system and iv) horticulture value chain financing. ACAC while approving the new ideas, set targets for scaling up pilot projects.

ACAC meeting was attended by senior officials of federal & provincial governments, Presidents/CEOs of banks, members of provincial chambers of agriculture, progressive farmers, representatives of regional farming communities and SBP senior officials.

You may also like