MULTAN – The State Bank of Pakistan (SBP) has reaffirmed its commitment to boosting agriculture financing and driving sustainable growth in Pakistan’s agriculture sector.
Speaking at the Agricultural Credit Advisory Committee (ACAC) meeting in Multan on Friday, SBP Governor Jameel Ahmad highlighted contributions of agriculture sector to food security, rural livelihoods, and its integration with the industrial and services sectors.
Acknowledging challenges like low productivity, climate change impacts, and limited financial inclusion, he urged banks to prioritize agricultural finance as a core and viable business line.
The Governor noted that the agriculture sector achieved remarkable growth during FY24. In Q1-FY25, however, agricultural growth slowed down to 1.2% from 8.1% last year and has resulted in a relatively slower GDP growth of 0.9% against 2.3% recoded in Q1-FY24.
There are signs of a modest wheat crop, highlighting the need for resilience and innovation in agriculture for sustained growth. During FY24, due to collaborative efforts by SBP and the banks, a record credit disbursement of Rs. 2,216 billion was witnessed, marking a 25% annual increase.
Building on this momentum, the first half of FY25 recorded disbursements of Rs. 1,266 billion whereas the number of borrowers rose modestly to 2.86 million. To increase the number of small borrowers particularly in underserved and unserved areas, the Governor emphasized the banks to expand their rural presence by designating more branches for agri-lending and deploying additional agricultural credit officers.
He urged banks to fully implement their Agricultural Credit Expansion Plans and invest in human resources, infrastructure, and digital technologies to better serve the farmers. He encouraged financial institutions to collaborate with relevant Government departments, fintechs, microfinance institutions, and Agri-Tech companies to deliver end-to-end digital loan solutions and advisory services tailored for small farmers.
He highlighted that there are three key areas for stakeholders to focus to uplift the agriculture sector. First, addressing the climate change challenges calls for targeted strategies to mitigate risks and enhance resilience by adopting climate-smart agriculture, green financing, and farmer training to ensure food security and sustainable growth.
Second, leveraging modern technology is crucial for transforming Pakistan’s agriculture. Globally, Geo-spatial technologies are transforming agriculture by enabling precise crop monitoring, enhancing resource management, and minimizing production risks. Pilot projects in Pakistan can adopt these tools to enhance productivity and reduce resource waste.
Third, enhancing focus on livestock sector, which contributes 14% of GDP and 2.1% of the country’s total exports, offers massive opportunity for diversifying income streams and reducing dependency on traditional crop cycles by creating exportable surplus.
Adopting advanced technologies like efficient breeding, improved dietary regimes, and manure management systems, can increase productivity and also align with Pakistan’s climate goals to reduce greenhouse gases by 50% till 2030.
