SBP to support post harvest agricultural finance
The State Bank of Pakistan (SBP) Deputy Governor Saeed Ahmad said on Wednesday that Warehouse Receipt Financing was one of the most important initiatives in terms of promoting post harvest agricultural finance in the country.
Addressing leadership workshop on “Warehouse Receipt Financing in Pakistan” organized jointly by SBP and Food and Agriculture Organization (FAO) in Karachi, the deputy governor highlighted that in Pakistan, post harvest losses were estimated to be around 25-35 per cent of crops and horticulture irrespective of the fact that a big part of our population remained malnourished.
Ahmad said that Pakistan is one of the leading agricultural producing countries in the world. However, shortage of warehousing and storage facilities, lack of standardization, non existence of independent collateral verification, lower access to financing and non-availability of transaction data has hampered the development of an efficient commodity trading market. This in turn has led to excessive produce wastages, high price volatility, and lower levels of farmers’ access to financing. He termed Warehouse Receipt Financing as an initiative which could turn around the country’s agricultural landscape.
The deputy governor informed the participants that SBP had been collaborating with SECP for formulating a regulatory framework for establishing commodity Warehouse Receipt Financing mechanism. He appreciated the role of Pakistan Mercantile Exchange (PMEX), banks, insurance companies, FAO, and other stakeholders and their joint efforts for scaling up of this financing system in the country.
He encouraged participants to join in the efforts for the development of a system to provide physical commodity storage, marketing, and Warehouse Receipt Financing mechanisms in Pakistan. He assured that the State Bank would continue to play an active role in this regard.
The event was also addressed by SBP Executive Director Syed Samar Hasnain, FAO Pakistan Deputy Representative Francisco Gamarro, Warehouse Receipt Financing Voca Consultant UK Expert Krassimir Kiriakov, ACE Global Depository Services Pakistan CEO Fahadullah Khan and Pakistan Mercantile Exchange (PMEX) Head of Research, Product Development and Risk Hasan Mahmood.
Around 130 senior executives of banks, insurance companies, SECP, FAO, PMEX and other stakeholders attended the event which was followed by a two day Training of Trainers (ToT) session for around 50 participants from banks and other stakeholders.