The Governor of the SBP has urged banks to support the agriculture sector.

Governor of the State Bank of Pakistan (SBP), Jameel Ahmad, encouraged banks on Thursday to execute the Kissan Package in word and spirit, and promised them of full support wherever needed.

He stated that although the government, companies, and society recognise such risks, we must take early action and dedicate necessary resources for research and development of related goods and services, as well as stakeholder capacity building, to confront them preemptively.
He praised banks for disbursing Rs. 1,419 billion in farm finance in FY22. He stated that a target of Rs. 1,819 billion has been established for FY23 in accordance with the government’s priorities, and that Rs. 664 billion has already been disbursed during the first five months of FY23.

According to the governor, the prime minister announced the Kissan Package, which includes agriculture loan restructuring and rescheduling, a mark-up waiver for outstanding small loans in flood-affected areas, interest-free loans for subsistence and landless farmers, subsidised loans, and a risk-sharing scheme for farm mechanisation, among other support measures.

He went on to say that the package will help farmers recover from the effects of recent floods, and he asked banks to follow it in letter and spirit.

With regard to the SBP’s recent pledge to transforming conventional banking to Islamic banking over the next five years, the governor further emphasised that banks have a significant chance to capitalise on the untapped potential of Islamic agriculture finance.

He remarked that the percentage of Islamic finance in agriculture financing is still fairly low and urged the sector to concentrate on establishing demand-driven Islamic financing solutions that are especially tailored to the needs of farmers.