Karandaaz partnership with NRSP Agricultural Processing Company Reaping Rewards



Karandaaz Pakistan, following its mandate of promoting access to finance for micro, small and medium-sized businesses through a double bottom line investment platform, announced an equity investment of PKR 600 million in National Rural Support Programme (NRSP)’s subsidiary Agriculture Processing Company Limited (APCL).

This investment will help APCL scale up warehousing, financial inclusion, and the incidence of rural industrialization, particularly for small-holding farmers. The investment made in October 2020 helped NRSP APCL install rice processing capacity of 40,000 tons of paddy per annum and expand the warehousing capacity of 5,250 tons to 20,000 tons.

In 2021, NRSP APCL became the first accredited warehouse of the country to issue electronic warehouse receipts. During the current season the facility issued electronic warehouse receipts for 3,000 tons of paddy. As a result of Karandaaz investment in NRSP APCL, farmer income has increased as market imperfections caused by Aarti commission and inefficient weight measurement practices are eliminated, cost of capital via access to warehouse receipt finance are reduced, and seasonal arbitrage ensure better, competitive prices for farmers at the time of harvest. NRSP APCL’s exports are worth USD 1,076,250 as of March 2022.

Speaking about the vision behind setting up the facility, Dr. Rashid Bajwa, Chairman NRSP APCL explained, “Pakistan employs 45% of its labor force in agriculture but agriculture’s share in GDP remains a mere 21%. This is because major crops are mostly produced by subsistence farmers with low yield. Low yields are associated with a vicious sort of generational bondage relationship between small farmers and Aartis (whole sellers) who often charge hidden / high interest rates on in kind financing of unbranded and low-quality input supplies, compelling farmers to make distress sales at low prices. NRSP established NRSP APCL as a for-profit subsidiary to demonstrate the significance of investing in back-to-back value chain wherein the small and landless farmers are provided farm inputs such as credit, seed, fertilizer, advisory, and postharvest opportunities to decide whether to store or sell their crop at competitive rates to their advantage.

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