State Bank of Pakistan Governor Jameel Ahmad on Thursday urged banks to support the agriculture sector to help it recover from the devastation caused by the heavy torrential rains and flood a few months ago.
He was chairing the annual meeting of the Agricultural Credit Advisory Committee in Hyderabad, said a SBP statement.
Referring to the devastation caused by recent floods, the Governor observed that climate change was the biggest long-term threat to the country due to its unforeseen impacts. The government, businesses, and societies had recognized such threats and there was a need to take timely actions and allocate required resources for research and development of relevant products and services and capacity building of stakeholders to address them preemptively.
He appreciated banks in achieving unprecedented agriculture credit disbursement of Rs1,419 billion in the fiscal year 2021-22 FY22. For FY23, the target of Rs1,819 billion had been set in line with Government’s priority. During the first five months of FY 23, Rs 664 billion had already been disbursed.
Prime Minister Muhammad Shahbaz Sharif had announced the Kissan Package, comprising of restructuring and rescheduling of agriculture loans, mark-up waiver for outstanding small loans in flood-affected areas, interest-free loans for subsistence and landless farmers and subsidized loans, and risk sharing scheme for farm mechanization, besides other support measures.
He elaborated that the package will facilitate the recovery of farmers from the impact of recent floods and urged banks to implement the package in letter and spirit. He also assured SBP’s full support to the banks wherever needed.
The governor also underlined that banks have a huge opportunity to exploit the untapped potential of Islamic agriculture financing with respect to SBP’s recent commitment to the transformation of conventional banking to Islamic banking in the next five years.
He noted that the share of Islamic financing in agriculture financing is still quite low and urged the industry to work on developing demand-driven Islamic financing products, specifically tailored to the requirements of the farming community.
Governor’s inaugural address was followed by a presentation on the performance of banks in agricultural financing. The ACAC deliberated on the new directions in agricultural financing particularly regarding climate-smart agriculture practices and the role that financial institutions could play.
Moreover, the champion banks, nominated by the ACAC to spearhead the efforts in underserved areas, presented the progress in their respective assigned underserved provinces or regions. The ACAC 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 SBP senior officials.