The State Bank of Pakistan Acting Governor Ashraf Mahmood Wathra has announced a six-point action plan for boosting agricultural financing in the country.
Addressing a meeting of Agricultural Credit Advisory Committee (ACAC) at SBP, Karachi on Monday he outlined his action plan.
According to plan (i) the launch of Financial Innovation Challenge Fund (FICF) in Rural & Agriculture Finance to foster innovation and test new markets, lower cost of delivery, streamlining systems and procedures to provide more efficient new ways of meeting the larger demands of farming community; (ii) launch of country-wide Internship Programme for 100 top agri graduates to be funded under the ADB’s Improving Access to Financial Services Endowment Fund; (iii) upward revision in the provisional agri disbursement target of Rs 360 billion to Rs 380 billion for 2013-14 in the light of banks’ encouraging performance in the last two years.
The target is 13pc higher from Rs 336 billion disbursed in 2012-13; (iv) banks to be assigned targets for outstanding agri portfolio and number of borrowers to have high impact of agri financing at grass root level from the current year; (v) SBP to make agricultural finance a key indicator of performance of banks, including Islamic banks, which will be reflected in their supervisory ratings; and (vi) formulation of a working group to review the state of affairs of small farmers financing and making recommendations for increasing financing to this segment and also bringing in additional small farmers into formal financing system.
Referring to the potential of agriculture sector in the economic development of Pakistan, Wathra said that Pakistan is the 9th largest producer of wheat, 4th largest producer of cotton and 12th largest producer of rice in the world. ‘Similarly, Pakistan is ranked one of the top ten largest producers in minor agriculture commodities, 8th worldwide in farm output’, he added.
Wathra said that agri. finance is close to his heart as he comes from an agriculturist background. ‘Hence it has become one of his top priorities since he joined SBP’, he added.
He also urged the farmers’ representatives and government departments to contribute in the efforts of banks and address the demand side bottlenecks including low yield, proper marketing & storage, water efficiencies, land record management, adoption of modern techniques, mechanisation and other agri. innovations.