KARACHI: Dr. Reza Baqir, Governor of the State Bank of Pakistan (SBP), complimented banks on Monday for disbursing Rs1.4 trillion in farm loans in FY21, according to a statement.
Dr. Baqir expressed these comments while chairing the Agricultural Credit Advisory Committee’s (ACAC) annual meeting in Multan on Monday.
In FY2020/21, the SBP governor praised banks for reaching a historic level of farm loan disbursement of Rs1.4 trillion.
Despite the hurdles posed by the Covid-19 epidemic, he praised the efforts of 50 financial institutions that worked together under the ACAC’s leadership to reach 91% of the objective.
In his inauguration address, he emphasized that, in accordance with the SBP’s strategy change and important policy steps, the banks’ leadership can now take this trip to the next level of qualitative improvement in farm loans.
The governor of the SBP underlined the need of addressing the quality, geographical imbalances, and unequal distribution of credit among various categories of borrowers while announcing the current year’s farm credit goal of Rs1.7 trillion with 5 million borrowers.
A comprehensive scoring methodology to rate banks according to key farm credit metrics and goals was unveiled by the governor as one of many new steps to assist enhance agriculture finance.
To maintain a competitive atmosphere, banks that do well will be appropriately recognized, while underperforming banks will be aggressively pushed to concentrate on measures that need improvement.
To identify a bank that is willing to volunteer as a champion/lead bank in an underserved province or region. Establishing helpdesks in disadvantaged regions to assist farmers, as well as initiating targeted and joint awareness initiatives with a broad audience, are further moves in this direction.
He stated that the SBP’s goal would serve two purposes: it will improve farmers’ financial inclusion while also giving banks greater lending options.
When the governor convened the ACAC conference in Multan, he emphasized the area’s enormous agricultural potential as well as the chances for developing farm financing.
Following that, a presentation on bank performance in agricultural finance was given. The ACAC discussed new agricultural finance approaches, including climate-smart agriculture practices and the role that financial institutions may play.
The Committee also addressed ways to improve the effectiveness of the country’s current farm finance infrastructure. In the second session of ACAC, new and innovative ideas in the areas of value chain solutions, electronic warehouse receipt financing, digital loan origination system, and horticulture value chain financing were presented by selected banks and other stakeholders. The Committee approved the new ideas and set targets for scaling up pilot projects.
Top officials from the federal and provincial governments, bank presidents/CEOs, members of provincial chambers of agriculture, progressive farmers, representatives from regional agricultural communities, and senior SBP officials all attended the meeting.