Karachi, July 8, 2024 : The Governor, State Bank of Pakistan (SBP), chaired the second Steering
Committee meeting on July 4th 2024 on initiatives aimed at boosting the agriculture, small and
medium enterprises (SME), and digital & technology sectors within the banking industry. These
steps are part of SBP’s and Pakistan Banks Association (PBA) ongoing efforts to promote financial
inclusion and support economic growth in the country.
SBP has issued letters to all banks to develop and submit their five years Agriculture and SME
finance expansion plans and strategies to significantly grow these portfolios over the next five
years. As part of itsVision 2028, SBP aims to increase outstandingAgri-finance portfolio to Rs 1,000
billion with total disbursements exceeding Rs. 3,000 billion by the end ofJune 2025. It further
envisions to double the SME financing to Rs. 1,100 billion over the next five years with Rs. 100 billion
to be added by June end 2025.
The SBP is working closely with PBA to support commercial banks to enhance their lending in both
sectors to stimulate entrepreneurship, create jobs, help farmers improve productivity, invest in
modern equipment, expand their operations and drive economic development at the grassroots
level. Furthermore, the Central Bank has taken measures to promote digital and technology-driven
solutions in the banking sector by encouraging banks to adopt innovative technologies to grow
digital payments, and develop digital lending platforms to improve access to financial services for
underserved populations and drive efficiency especially inAgri and SME industry, and above all
reduce cash in circulation to achieve much needed reduction in inflation, thus, interest rates.
PBA highlighted its key initiatives for deepening and broadening of financial services for priority
sectors including i) development of SME and Agri Environment and Performance Index (SEPI/AEPI)
for assessing, improving, and sustaining the performance of both sectors, ii) promotion of
Electronic Warehouse Receipt Financing including warehouse accreditation, iii) revitalization of
Agricultural Cooperatives, iv) set up of escrow services to boost e-commerce, v) installation of Cash
Deposit Machines (CDMs) in commercial bank branches to reduce currency in circulation, vi)
development of virtual prepaid card solution at merchant outlets to encourage digital payments,
and vii) set up of a Private Equity fund to support fintechs to develop solutions and use cases to
help reduce currency-in-circulation and help farmers and SMEs’ access to financial services.
TheGovernor, SBP appreciated the initiatives and emphasized that active collaboration between
SBP and PBA to promote financing to priority sectors is critical for ensuring sustained access of
these sectors to financial services as well as fostering inclusive growth.
Zafar Masud, Chairman PBA stated that “these measures underscore PBA’s commitment to
supporting key sectors of the economy and driving sustainable growth in Pakistan. By focusing on
agriculture, SMEs, and digital & technology, we aim to create a more inclusive, resilient, and
competitive banking industry that serves the needs of all stakeholders.”
The Finance Minister of Pakistan is overseeing these efforts himself as the initiatives have been
identified on his advice.
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