The Pakistan Banks’ Association (PBA) is spearheading the implementation of Climate Smart Agriculture Financing (CSAF) across the banking sector, focusing on the ‘Methodology for Allocating the Climate Smart Agriculture Financing Targets’ for banks. This initiative aims to align agricultural practices with climate resilience and carbon emission reduction.
In recent dialogues with the State Bank of Pakistan (SBP), the PBA CEO, along with the CSAF-focused subgroup, discussed the ambitious financing targets initially proposed by SBP. After thorough deliberations, it was mutually agreed to set a CSA financing target at 1% of the total Agriculture Credit Disbursement target for the fiscal year 2022-2023, significantly lower than the initial 10% target proposed by SBP.
Climate Smart Agriculture (CSA) emphasizes sustainable farming practices that combat climate change impacts while reducing carbon footprints. This approach ensures the agricultural sector’s adaptability and resilience in the face of changing climatic conditions.
In a pivotal annual meeting of SBP’s Agriculture Credit Advisory Committee (ACAC) held in December 2022 in Hyderabad, chaired by the Governor of SBP, Mr. Tawfiq Hussain, CEO of PBA, presented the CSAF strategy. The committee deliberated on the presented strategy, with the Governor urging PBA to define specific financing targets for CSA-related products.
The initial framework for CSAF was formulated by PBA’s Agriculture Finance Sub-Committee, outlining a comprehensive action plan. This includes the development of innovative CSAF products, setting product financing targets, adopting specific Key Performance Indicators (KPIs), promoting CSAF products, and allocating refinance limits to farmers.
Source: PBA