The State Bank of Pakistan (SBP) held the Agricultural Credit Advisory Committee (ACAC) meeting in Multan on January 31, 2025, reaffirming its commitment to strengthening agricultural financing and ensuring sustainable sectoral growth. SBP Governor Jameel Ahmad emphasized the critical role of agriculture in Pakistan’s economy, highlighting its contributions to food security, rural livelihoods, and its linkages with industry and services. However, he noted that the sector continues to face challenges such as low productivity, climate change effects, and limited financial inclusion.
Despite robust growth in FY24, agriculture saw a slowdown in Q1-FY25, with growth dropping to 1.2% from 8.1% in the same period last year, resulting in GDP growth of only 0.9% compared to 2.3% in Q1-FY24. Concerns over a modest wheat crop further underscore the need for resilience and innovation. Governor Ahmad stressed the importance of treating agricultural financing as a core business strategy rather than a peripheral service.
SBP’s efforts have already led to a record credit disbursement of Rs. 2,216 billion in FY24, marking a 25% annual increase. In the first half of FY25, Rs. 1,266 billion was disbursed, with agricultural borrowers increasing slightly to 2.86 million. To expand financial access, the Governor urged banks to strengthen their rural presence by increasing agri-lending branches and appointing additional agricultural credit officers. He also emphasized the need for financial institutions to fully implement their Agricultural Credit Expansion Plans, investing in infrastructure, human resources, and digital technologies to better serve farmers.
Governor Ahmad encouraged collaboration between banks, government departments, fintechs, microfinance institutions, and Agri-Tech companies to develop end-to-end digital loan solutions and advisory services tailored to small-scale farmers. He identified three key areas for sectoral growth: addressing climate change through climate-smart agriculture and green financing, leveraging geo-spatial technologies for precision farming, and prioritizing the livestock sector, which contributes 14% to GDP and 2.1% to exports. Advanced breeding techniques, improved dietary regimes, and better manure management systems could not only enhance productivity but also help Pakistan achieve its goal of reducing greenhouse gas emissions by 50% by 2030.
The Governor also acknowledged the challenges faced by farmers in Balochistan and announced SBP’s plan to convene stakeholders in Quetta to address agricultural credit bottlenecks. He suggested replicating similar efforts across other provinces to ensure inclusive financial access.
A key session at the meeting focused on climate-smart agriculture, showcasing how geo-spatial technologies can improve crop monitoring, resource management, and climate resilience. The session also highlighted the Climate Resilience Fund, a World Bank initiative providing financing opportunities for microfinance banks to support climate adaptation strategies in agriculture.
Concluding the meeting, Governor Ahmad underscored Pakistan’s vast untapped agricultural potential. He called for collective efforts from banks, policymakers, and technology providers to expand financial access, foster innovation, and tackle climate challenges. He reaffirmed SBP’s commitment to using ACAC as a strategic platform for addressing the sector’s evolving needs. The meeting was attended by key stakeholders, including banking executives, government officials, and representatives from the agriculture sector.