KARACHI: State Bank of Pakistan (SBP) Deputy Governor Sima Kamil has advised the banks to leverage the SBP’s initiatives to boost agriculture financing.
According to a statement issued on Wednesday, the deputy governor chaired the Quarterly follow-up meeting of the Agricultural Credit Advisory Committee (ACAC) in Karachi.
The meeting reviewed progress on key decisions taken by ACAC in its last meeting held in December 2021 and also the agriculture credit performance in July-April FY22.
The SBP deputy governor, while appreciating the efforts of all the stakeholders in the implementation of various ACAC decisions, urged the banks to leverage the SBP’s recent initiatives and expedite efforts to boost agriculture financing and enhance outreach, especially in the underserved areas.
The meeting took stock of the newly-developed Agriculture Credit Scoring Model to measure performance of the banks adopted by the SBP and reviewed the scoring model’s results up to March 2022. The Habib Bank Limited (HBL) stood at the top among the large banks with a score of 63.7 of 100; Bank of Punjab ranked on top among the mid-sized banks with a score of 65.2; Meezan Bank scored 42.4, the highest among Islamic banks; while the HBL Microfinance Bank stood at the top among the microfinance banks with a score of 73.4.
The participants were informed that the performance scorecards of all the agriculture lending banks will be published annually on the SBP website.
Highlighting the overall agriculture credit performance, Kamil appreciated the efforts of the banks in disbursing Rs1.059 trillion during July-April FY22, which is 63 per cent of the assigned target of Rs1.7 trillion for the year.
However, she noted with concern the relatively slow performance in terms of 1.4 per cent decline in the agriculture credit disbursement, compared with Rs1.074 trillion disbursed during the same period of the last year and attributed it to the slowdown in the performance of some major commercial and specialised banks.
The performance of the mid-sized commercial banks, Islamic banks and microfinance banks and institutions has improved over the year.
The chair appreciated the growth in the provincial disbursement of agriculture credit across all the underserved areas.
The disbursement in Balochistan increased 73 per cent during July-April FY22, compared with July-April FY21, 55 per cent in GB, 43 per cent in AJK, 23 per cent in Sindh and 17 per cent in KP.
The chair highlighted that this improvement was the result of various interventions, including the champion bank model, which was adopted in the last ACAC meeting.
In December 2021, ACAC had nominated six banks as champions for identified underserved provinces and regions under the champion bank model, which included HBL for Balochistan, HBL Microfinance Bank for GB, NBP for AJK, Bank of Khyber for KP, UBL for Sindh and the Bank of Punjab for Southern Punjab region.
The six champion banks apprised the committee regarding the activities performed in their assigned regions under this initiative and presented their current developments and future action plans.
Kamil, extoled the efforts of the champion banks and urged them to bend over backwards to achieve the desired objectives.
Another key decision of the last ACAC meeting was to develop a strategy for the promotion of Electronic Warehouse Receipt Financing (EWRF).
The participants were apprised that the EWRF uptake strategy has been developed and its various actions have been implemented, including establishment of EWRF task force, signing of service usage agreements of banks with collateral management company, allocation of EWRF targets to the banks and the capacity-building of the stakeholders, among others.
Thereafter, a strategy to promote climate smart agriculture financing was also presented by the representative of Pakistan Banks’ Association, which emphasised on creating awareness among the farmers and bankers and also proposed up-scaling of the existing products offered by the banks in this domain.
Presidents and CEOs and agriculture credit teams of commercial banks and the SBP officials attended the meeting. The meeting ended with a vote of thanks to the chair.
