KARACHI: The State Bank of Pakistan (SBP) has asked the banks to ensure easy, timely and hassle-free access of farmers to all financial services including credit, deposits, payments etc.

Chairing the annual meeting of the Agricultural Credit Advisory Committee (ACAC), SBP Governor Jameel Ahmed said that despite various challenges including floods the agriculture credit disbursements reached an impressive level of Rs1,776 billion during FY23, witnessing year-on-year growth of 25.2 per cent and achieving 97.6pc of the overall target of Rs1,819bn.

The governor expressed optimism about the strong recovery in the agriculture sector, paving the way for a projected real GDP growth in the range of 2-3pc in FY24.

He said that the disbursement target for FY24 was accordingly set at Rs2,250bn, which was 26.7pc higher than the disbursement made last year.

“The stellar growth of 30pc during July-October FY24 gives optimism that we are on track to comfortably achieve the disbursement target,” he added. He urged the banks to intensify their efforts to not only meet but also surpass the target.

Acknowledging the challenges, particularly attrition of borrowers, the governor informed the committee that the SBP will engage with each bank individually to develop plans and strategies to achieve a sustainable increase in agri borrowers continuously.

The governor advised banks to not only develop their agrifinance capacity but also develop partnerships with microfinance institutions (MFIs) to increase the outreach of agriculture and rural finance services.

He also emphasised the critical need to improve the productivity of farmers to make them a better risk for the banks.

He urged banks to collaborate and partner with AgriTechs, Agricultural Universities, Provincial Agricultural Departments and other agricultural stakeholders to improve the farmers’ productivity through the provision of quality inputs, better farming techniques and optimum use of agri-tech.

“The small farmers also need to be facilitated in getting a market competitive price for their produce and the banks can connect them with large and reputed buyers,” he said.

Mr Jameel highlighted another significant area requiring immediate consideration — the promotion of developmental loans, specifically directed towards the mechanisation of the agriculture sector.

He advised banks to assess the feasibility of financing agri-service providers who supply agricultural machinery and equipment to farmers on a rental basis.

Published in Dawn, December 16th, 2023