Governor of State Bank of Pakistan (SBP) Jameel Ahmad urged banks to ensure easy, timely and hassle-free access of farmers to all financial services.
The remarks came during the annual meeting of the Agricultural Credit Advisory Committee (ACAC), held on December 14, 2023 in Lahore, read a statement released by SBP on Friday.
In his remarks, the Governor SBP emphasised the need to strengthen and promote growth in the agriculture sector, which is pivotal for the socioeconomic development of the country.
Ahmad highlighted that despite various challenges including floods, the agriculture credit disbursements reached an impressive level of Rs1,776 billion during FY23, witnessing year-on-year growth of 25.2% and achieving 97.6% of the overall target of Rs1,819 billion.
The central bank chief also showed optimism about the strong recovery in the agriculture sector, paving the way for a projected real GDP growth in the range of 2 – 3% in FY24.
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He said that the disbursement target for FY24 was accordingly set at Rs2,250 billion, which was 26.7% higher than the disbursement made last year.
“The stellar growth of 30% during July-Oct 23 gives optimism that we are on track to comfortably achieve the disbursement target,” Ahmad added.
Acknowledging the challenges, particularly attrition of borrowers, the SBP Governor informed the ACAC that the central bank will engage with each bank individually to develop plans and strategies to achieve sustainable increase in agri borrowers continuously.
He advised banks to not only develop their own agri-finance capacity but also develop partnerships with Microfinance Institutions (MFIs) to increase the outreach of agriculture and rural finance services.
The SBP governor urged banks to collaborate and partner with AgriTechs, agricultural universities, provincial agricultural departments and other agricultural stakeholders to improve the farmers’ productivity through provision of quality inputs, better farming techniques and optimum use of agri-tech.
Moreover, the SBP governor highlighted another significant area requiring immediate consideration – the promotion of developmental loans, specifically directed towards the mechanization of the agriculture sector.
He advised the banks to assess the feasibility of financing agri-service providers, which provide agricultural machinery and equipment to farmers on a rental basis.
Lastly, the State Bank chief underscored the imperative for all banks to fully embrace the Punjab Land Records Authority’s Land Record Management Information System (PLRA’s LRMIS) for the processing of agricultural loans by the end of June 2024 and urged that other provinces/regions should also expedite the digitization of their land records.
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