STAFF REPORT KHI: The State Bank of Pakistan (SBP) has urged banks to adopt agricultural financing as a viable business model through development of specific products/schemes and disseminate best practices through grass-roots level programmes for farmers.
Presiding over a recently held meeting of Agricultural Credit Advisory Committee (ACAC), SBP Governor Yaseen Anwar said that heavy rains of 2011 and devastating floods in 2010 had greatly affected the national economy in general and agriculture sector in particular.
He explained that the agriculture remains the mainstay with a contribution of more than 21 per cent to the GDP and around 60 per cent of the population depends on agriculture related activities for its livelihood.
“The federal and provincial governments would also need to initiate support and relief packages for the affected areas,” he said suggesting timely and quick loan disbursement to help the agriculture sector and revival of economic activities in the affected areas.
“Banks have been also allowed to restructure the existing loans and written-offs in cases where the recovery of loans is not possible,” Anwar added.
He said that the crop loan insurance scheme introduced by the government for production loans for five major crops has also supported the sector whereby claims of around Rs 800 million had been settled by insurance companies in 2010 and 2011.
The SBP Governor announced setting up of an Implementation Committee to ensure timely implementation of the action plan prepared by the ACAC Special Committee, constituted in December 2010.
The committee will also collaborate with Regional Agriculture Focus Groups of SBP-BSC offices to get feedback on the implementation strategy and ensure timely implementation of decisions and recommendations.