SBP chief urges banks to focus on climate-resilient, tech-driven agri-financing

KARACHI: State Bank of Pakistan (SBP) Governor Jameel Ahmad has encouraged banks to focus on climate-resilient and technology-based agricultural financing, adding that the sector plays a crucial role in the nation’s economy.

Speaking at the Agricultural Credit Advisory Committee (ACAC) meeting in Multan on Friday, Ahmad acknowledged the sector’s growth crunch in recent months and stressed the need for innovation and resilience.

The SBP governor asked banks to expand their agricultural credit expansion plans, focus more on their rural presence and increase the number of agricultural credit officers to reach underserved borrowers, particularly small farmers.

The governor mentioned three key areas for development: combating climate change through climate-smart agriculture and green financing; leveraging technology, including geo-spatial tools, for precision farming; and boosting the livestock sector, which contributes significantly to GDP and exports. He encouraged collaboration with fintech, microfinance institutions and agri-tech companies to develop digital loan solutions and advisory services.

Ahmad announced that the SBP will convene a meeting in Quetta with stakeholders, including government departments, banks, and farmers’ associations, to address credit bottlenecks in Balochistan’s agricultural sector, with plans to replicate this approach in other provinces.

The ACAC meeting featured a session on climate-smart agriculture, highlighting the World Bank’s Climate Resilience Fund and exploring the use of geo-spatial technologies for crop monitoring and resource management.

During the meeting, Ahmad also highlighted the record Rs2.216 trillion in agricultural credit disbursed during FY2024, a 25 per cent year-on-year increase. While disbursements in the first half of FY25 reached Rs1.266 trillion, agricultural growth slowed to 1.2 per cent in Q1FY25, down from 8.1 per cent the previous year, impacting overall GDP growth.

He concluded by calling for a collective effort from banks, policymakers, and technology providers to unlock the vast potential of the country’s agricultural sector.

The meeting brought together presidents of commercial and microfinance banks, government officials, and representatives from farmers’ associations.