KARACHI: After achieving a record-high disbursement of Rs1 trillion to the agriculture sector in the last fiscal year, the State Bank of Pakistan has set next fiscal year’s target at Rs1.35tr.

SBP Governor Reza Baqir, while chairing the annual meeting of the Agricultural Credit Advisory Committee in Peshawar, appreciated banks for their efforts in increasing credit to the agriculture sector in FY19.

“It is for the first time in Pakistan’s history that credit to the agriculture sector has surpassed one trillion rupees,” he remarked in his keynote address.

Baqir, however, urged banks to enhance their efforts to achieve qualitative aspects of the assigned targets as well in line with the strategic shift and key policy actions taken by the SBP regarding agricultural financing.

He highlighted that most of the banks met their assigned targets except for some of banks including Zarai Taraqiati Bank Ltd, Punjab Provincial Cooperative Bank Ltd, some private banks and Islamic banks.

The province-wise agriculture credit disbursement witnessed double-digit growth; however, banks struggled to achieve their assigned targets in the underserved regions.

The governor apprised the committee that the SBP is considering three policy actions to further promote financial inclusion in the agriculture sector.

At first, enhancing transparency through disclosure of bank-wise performance statistics on monthly basis covering agriculture credit disbursement, geographic distribution, outstanding amount, number of borrowers, and agriculture credit infrastructure.

Secondly, the SBP will introduce a comprehensive scoring model for ranking of banks against key agriculture credit indicators and targets. Third, introducing incentives and penalties based on performance scores of banks.

The keynote address was followed by a presentation wherein the performance of banks on agricultural financing was reviewed against the targets during FY19.

While assigning the agriculture credit target for FY20, it was shared that the overall disbursement target of Rs1.350tr has been assigned to banks which is 89 per cent of the total estimated agriculture credit requirement of Rs1.518tr.

Published in Dawn, November 20th, 2019