KARACHI: The recent meeting of the Steering Committee presided over by the State Bank of Pakistan (SBP) governor discussed initiatives aimed at strengthening the agriculture, small and medium enterprises (SME), and digital & technology sectors through the banking industry.
These efforts, undertaken by SBP in collaboration with the Pakistan Banks Association (PBA), are part of a broader strategy to promote financial inclusion and support economic growth in the country.
SBP has directed all banks to formulate and submit five-year plans to expand agriculture and SME finance, with targets set to significantly grow these portfolios by June 2025.
As part of its Vision 2028, SBP aims to increase the outstanding Agri-finance portfolio to Rs1,000 billion, with total disbursements exceeding Rs3,000 billion by the specified date. Additionally, the goal is to double SME financing to Rs1,100 billion over the next five years, with an interim target of Rs100 billion by June 2025.
In collaboration with PBA, SBP is supporting commercial banks in enhancing their lending to these critical sectors to stimulate entrepreneurship, create jobs, improve productivity for farmers, facilitate investment in modern equipment, expand operations, and drive economic development at the grassroots level.
The SBP is also promoting digital and tech-driven solutions within the banking sector, urging banks to adopt innovative technologies for wider digital payments and digital lending platforms.
These efforts aim to enhance financial access for underserved groups, improve efficiency in agriculture and SME sectors, and help curb inflation and manage interest rates by reducing cash circulation.
PBA highlighted several key initiatives designed to deepen and broaden financial services for priority sectors. These initiatives include the development of the SME and Agri Environment and Performance Index (SEPI/AEPI) to assess, improve, and sustain sector performance.
They also focus on the promotion of Electronic Warehouse Receipt Financing and warehouse accreditation, as well as the revitalization of agricultural cooperatives. Another important initiative is the establishment of escrow services to boost e-commerce.
Additionally, PBA aims to reduce currency circulation by installing Cash Deposit Machines (CDMs) in commercial bank branches. To encourage digital payments, the development of virtual prepaid card solutions at merchant outlets is being pursued.
Finally, PBA is creating a Private Equity fund to support fintechs in developing solutions that reduce currency in circulation and improve access to financial services for farmers and SMEs.
The SBP governor praised these initiatives, emphasizing that collaborative efforts between SBP and PBA are crucial for ensuring continued access to financial services for priority sectors and fostering inclusive growth.
PBA Chairman Zafar Masud said these measures demonstrate PBA’s dedication to supporting critical sectors and promoting sustainable economic growth in Pakistan. By prioritizing agriculture, SMEs, and digital technology, PBA aims to build a more inclusive, resilient, and competitive banking industry that meets the needs of all stakeholders, he added.
He said the finance minister is personally overseeing these efforts, which have been identified based on his guidance. -PR
