KARACHI/LAHORE: The State Bank of Pakistan (SBP) on Friday announced that a task force has been established with increased participation of banks to boost the Electronic Warehouse Receipt Financing (EWRF) in the agriculture sector.

SBP Governor Dr Reza Baqir and Punjab Chief Secretary Kamran Ali Afzal chaired the first meeting of the task force.

“The goal of the EWRF is to promote agriculture finance and food security. The task force is established as part of a recent initiative by SBP to synergise the efforts of all stakeholders for the promotion of EWRF in Pakistan,” said the SBP.

The SBP said the EWRF task force is a high-level forum led by the central bank governor and comprises of senior officials from the federal and provincial governments, SBP, CEOs of banks and includes chairmen and managing directors of the SECP, PMEX, PBA, Passco and a collateral management company.

Earlier, on February 22, 25 banks signed the Service Usage Agreement with the collateral management company to commence EWRF operations.

The SBP announced a number of facilities for EWRF including subsidised financing, while the payment period was also extended.

During the meeting, the SBP governor announced measures to attract investment in the construction of new warehouses and silos through its Financing Facility for Storage of Agricultural Produce (FFSAP) in order to boost EWRF.

The facilities include increase in tenor of FFSAP loans from current seven years to 10 years; increase in the grace period from one year to up to two years to provide additional flexibility to investors and revision in repayment terms from monthly to quarterly or six monthly to align the facility with the seasonality in agriculture sector.

“Financing under FFSAP is available at six per cent per annum to end users on long-term basis for construction, expansion and balancing, modernisation and replacement (BMR) of steel, metal, concrete silos, warehouses and cold storage facilities for storing agricultural produce,” said the SBP.

The Task Force deliberated on the future course of action to enhance the uptake of EWRF in the country.

Dr Baqir said the strengthening of EWR regime in Pakistan will play a key role to bridge the gap between supply and demand of agriculture credit, minimize post-harvest losses, ensure better price discovery for farmers, and ultimately increase farmers’ profitability and counter food insecurity challenges.

On the occasion, Punjab chief secretary said the EWRF was a scheme for emancipation of farmers from the clutches of middlemen. Mr Afzal offered Punjab government’s complete support in implementation of the action plan adopted by the Task Force.

Low-cost housing facility

In a meeting with the Lahore Chamber of Commerce & Industry (LCCI) delegation, the SBP governor asked employers to avail the subsidised low-cost housing loan facility for their employees, stressing the risks of these loans would be borne by the government of Pakistan.

Dr Baqir said the SBP Asaan Finance Scheme (SAAF) would be a game changer in enhancing access to finance for small and medium enterprises (SMEs) as it would address the long outstanding challenge of lack of collateral faced by them. An SME mela would also be organised at the LCCI in collaboration with Smeda.

He said the women entrepreneurs recommended by LCCI would be facilitated for running their businesses.

LCCI President Mian Nauman Kabir said the 9.75pc policy rate would have dire consequences on economic growth rate. “We believe that it will hinder the process of industrialisation and private sector growth. Pakistan should bring its interest rate at par with the regional rates which are much lower.

He said the central bank deserved appreciation for launching the SMEs Asaan Finance Scheme for collateral-free lending to SMEs. In this regard, banks should be given strict timelines to roll out their products so that SMEs can benefit from this scheme, he added.

Published in Dawn, March 12th, 2022