Pakistan's agriculture sector sees PKR 1.266 trillion in credit disbursements

The agriculture sector in Pakistan witnessed credit disbursements totaling PKR 1.266 trillion ($4.5 billion) in the first half of FY25, with a modest increase in the number of borrowers to 2.86 million, according to the State Bank of Pakistan (SBP).

Governor Jameel Ahmad, speaking at the Agricultural Credit Advisory Committee (ACAC) meeting on Friday, noted that during FY24, collaborative efforts by SBP and the banks led to record credit disbursements of PKR 2.216 trillion, marking a 25% annual increase.

Ahmad highlighted the sector's remarkable growth in FY24. However, agricultural growth slowed to 1.2% in Q1-FY25, down from 8.1% last year, resulting in a slower GDP growth of 0.9%, compared to 2.3% in Q1-FY24.

Governor emphasized the need for resilience and innovation, noting signs of a modest wheat crop.

To boost the number of small borrowers, especially in underserved areas, he urged banks to expand their rural presence by designating more branches for agri-lending and deploying additional agricultural credit officers.

Ahmad acknowledged the sector's persistent challenges, including low productivity, climate change impacts, and limited financial inclusion. He urged banks to prioritize agricultural finance as a viable business line.

Looking ahead, he called for the full implementation of Agricultural Credit Expansion Plans and investment in human resources, infrastructure, and digital technologies.

He encouraged collaboration with government departments, fintechs, microfinance institutions, and Agri-Tech companies to deliver digital loan solutions and advisory services tailored for small farmers.

Ahmad outlined three key areas for stakeholders: addressing climate change challenges, leveraging modern technology, and enhancing focus on the livestock sector.

While addressing the issues faced by farmers in Baluchistan, Ahmad announced that SBP would lead efforts to convene stakeholders in Quetta to address agricultural credit bottlenecks, a model he suggested other provinces follow.

The meeting featured a session on climate-smart agriculture, showcasing geo-spatial technologies for precision crop monitoring and the Climate Resilience Fund, a World Bank initiative supporting climate adaptation strategies in agriculture.

Concluding the meeting, Governor Ahmad called for a collective effort to transform Pakistan's agriculture into a resilient, sustainable, and globally competitive driver of economic growth.

The ACAC meeting, under SBP's leadership, continues to address the evolving needs of the agricultural sector with participation from key stakeholders, including bank presidents, government officials, and representatives from agricultural associations.