Governor State Bank of Pakistan (SBP) Dr. Reza Baqir announced on Monday the agriculture credit target of Rs. 1.7 trillion for the current fiscal year, which will be made possible by reaching five million borrowers across the country.
The governor, who was chairing the annual meeting of the Agricultural Credit Advisory Committee (ACAC) in Multan, lauded the performance of banks in achieving the agriculture credit disbursement of Rs. 1.4 trillion in the fiscal year 2020-21. He remarked that the collective efforts of 50 financial institutions under ACAC helped achieve 91 percent of the assigned target despite the COVID-19 pandemic.
Dr. Baqir stressed the need for addressing the quality of credit, its geographical imbalances, and uneven distribution among different categories of borrowers.
He also announced two new measures to help boost agriculture financing. First, he said, a comprehensive scoring model would rank banks according to key agriculture credit indicators and targets. He added that in order to foster a competitive environment, the banks performing well would duly be recognized, whereas the underperforming banks would be strongly encouraged to focus on metrics where improvement was needed.
He maintained that the second measure designated a bank volunteering to serve as a lead bank in an underserved province or area. He held that further steps in this regard included establishing helpdesks in underserved areas to facilitate farmers in addition to launching targeted and collaborative awareness drives for an extensive outreach.
The governor said that SBP’s vision would serve a twofold purpose of enhancing farmers’ financial inclusion while providing more lending opportunities to the banks.
The meeting participants also deliberated on the new directions in agricultural financing, particularly the climate-smart agriculture practices and the role that financial institutions could play. The committee also discussed avenues to enhance the efficiency of existing agriculture credit infrastructure across the country.
A session was also held wherein selected banks and other stakeholders presented innovative ideas related to value supply chain solutions, electronic warehouse receipt financing, digital loan origination system, and horticulture value chain financing. The committee approved the new ideas and set targets for scaling up pilot projects.
The meeting was attended by senior officials of federal and provincial governments, Presidents/CEOs of banks, members of provincial chambers of agriculture, progressive farmers, representatives of regional farming communities, and senior officials of the central bank.