Federal Minister for Finance Senator Ishaq Dar has said that a holistic approach is needed for development of agricultural sector and agri-finance in Pakistan.
He was speaking as a chief guest at the launching ceremony of the second Challenge Round of Financial Innovation Challenge Fund (FICF) on “Promoting Innovative Rural and Agriculture Finance in Pakistan” on Thursday.
The programme is being funded by UKAid and implemented by the State Bank of Pakistan as part of “Pakistan Financial Inclusion Programme”.
Congratulating the State Bank and the UK government, he said this would go a long way in promoting inclusive economic growth through provision of demand-driven innovative financial services for the low-income and unbanked population particularly our agricultural households and rural entrepreneurs.
He reminded the audience of measures taken by PML (N) government in the 1990s which included banking sector reforms in Pakistan, adding that since then, Pakistan’s banking industry had witnessed a major transformation.
In his welcome address, Ashraf Mahmood Wathra, SBP acting governor, said financial innovation needed to be targeted towards the productivity of small farmers to combat poverty in rural areas. He said tackling poverty demanded fundamental rethinking and innovation.
He reminded the audience that improving financial access to alleviate poverty was a global challenge. “More than 2 billion adults in the world do not have access to formal or semi-formal financial services. At the same time, one billion people with mobile phones do not have even a basic bank account.”
He said both the government and the State Bank of Pakistan were addressing the challenge using innovative policy approaches and actions.
Emphasizing the strategic role of agriculture in ensuring food security, generating economic growth, reducing poverty and inequality, Wathra said that financial services outreach in the rural sector could play the most indispensable role in this regard, he added.
He told the audience briefly about SBP’s initiatives for promoting financial inclusion through agricultural finance. These include: advice to banks to formulate all-inclusive agri-finance policies and set up dedicated agri-divisions within banks; revision of per acre credit limits for crops, orchards and forestry which were previously set in 2008; livestock insurance scheme for borrowers; and inclusion of 7 microfinance banks into agri indicative target scheme.
