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State Bank of Pakistan
State Bank of Pakistan

SBP governor calls for harnessing technology platforms to enhance agricultural productivity

KARACHI: Federal, provincial governments and banks should harness technology platforms for enhancing agricultural productivity, the central bank governor said on Saturday.

 

 

 

 

Presiding over the mid-term review meeting of Agricultural Credit Advisory Committee (ACAC) in Hyderabad on February 7, State Bank of Pakistan Governor Tariq Bajwa said: “Holding ACAC meetings at various locations shows our commitment to promote agricultural financing in all regions, especially in the underserved areas.”

“We are convening this meeting for the first time in Hyderabad to provide impetus for agricultural finance in the region,” he said.

Reviewing the progress on agricultural credit during July-December 2018, the SBP governor appreciated the efforts of banks in promoting agricultural finance.

During the first half of FY18/19, banks have disbursed Rs527.3 billion, which is 42.2 percent of the total assigned target for FY18/19, and 22 percent higher than the disbursement made during the same period of the last year, he said.

The outstanding portfolio of agriculture credit also increased to Rs521 billion at the end of December 2018 from Rs442 billion in the preceding year, witnessing a growth of 17.9 percent.

Moreover, the number of outstanding borrowers also increased to 3.90 million at the end of December 2018 from 3.46 million in the corresponding period of 2017, posting a growth of 12.8 percent, he added.

Bajwa also appreciated the efforts of microfinance banks and institutions in providing financing to small and marginalised farmers.

Despite witnessing reasonable progress during FY18/19, the industry still faces various demand and supply side challenges. In particular, he highlighted the geographical disparities in the provision of agricultural credit, as the disbursements in KP, Balochistan and Gilgit-Baltistan still remain far from their respective targets.

 

 

 

 

Like-wise, the banks were advised to pay special focus on production loans for small farmers. The SBP governor also emphasised on the banks to enhance their outreach in terms of agricultural infrastructure by hiring agriculture credit officers.

He appreciated the efforts of Islamic banks in achieving a growth of 80 percent in disbursement during July-December 2018 compared to the same period last year; however, their share in total disbursement still remains less than three percent in overall agriculture credit.

The governor urged the banks to address these issues by adopting a more focused approach, especially towards the underserved areas to achieve Rs1,250 billion agriculture credit target for FY18/19, while bringing a qualitative shift in agriculture financing.

He also urged Islamic banks and Islamic windows of commercial banks to play an active role in expanding outreach in potential areas, particularly to faith sensitive farming community.

The inaugural remarks of the SBP governor were followed by a detailed presentation; wherein, the performance of banks on agriculture financing during the first half of FY18/19 was reviewed against their targets and potential areas of concerns were also highlighted.

The committee was also apprised by renowned agriculture professionals and representatives of banks on various innovative initiatives in agriculture financing, including adoption of land record management information system for agriculture financing in Punjab, promotion of high value crops, developing e-platform for the provision of quality agriculture inputs, and women empowerment through value chain financing for livestock / dairy in Gilgit-Baltistan.

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