The role played by Zarai Taraqiati Bank Limited (formerly Agriculture Development Bank of Pakistan "ADBP") for the betterment of the farming community and agriculturists of the country does not need any introduction. Since its inception in 1961, over the past almost 58 years the Bank has pioneered various technologies which has been proven pivotal in development of agro-based industry and brought a revolution in country's agriculture landscape.
This include, introduction and promotion of tetra-pack packaging industry (UHT treated milk), establishment of potato chips industry, introduction of combine harvesters, introduction of embryo transfer technology, to name the few. Zarai Taraqiati Bank Limited "ZTBL" is the only specialized bank of the country, offering banking and financing services to the rural populous of the country, operating through its vast network of 502 country wide branches, regulated through 32 Zonal Offices across the country.
In addition to services delivery at the doorstep of farming community, ZTBL's unique geographical presence in far-flung underserved/ under developed areas, i.e. where no other bank's branch exists is one of the key feature of bank's long standing services to its farming community.
Further ZTBL serves the needs of that specific rural segment, which is mostly considered as otherwise excluded (i.e. small /bottom of the pyramid farming community) being the vital drivers of country's agriculture productivity and growth engine. Further, the Bank displays the highest cumulative annual growth rate "CAGR" of 6.7 % in whole agriculture financing services industry and maintains AAA/A-1+ credit and entity rating , being highest in the industry for the last 5 consecutive years.
However, it is worth noting that during past one year, under the current management and leadership of Sheikh Aman Ullah - Acting President, the bank has displayed unprecedented and robust progress in bank's overall operations where the Bank has successfully up-scaled/expanded its services matrix by embarking upon new initiatives, leading to value innovation in bank's operations.
It is under the leadership of Sheikh Aman Ullah, that after 57 years, bank's model of business payment process has been innovated as ZTBL has embarked upon "Digitalization of Payments Platform" in January 2019. Previously the bank was operating under conventional banking modes of payments/services offering since its inception.
This initiative is focused towards ensuring greater Financial Inclusion, in conformity of National Financial Inclusion Strategy, included in 100 days agenda of present government, making ZTBL the first bank to comply in this regard. Accordingly, the Bank has installed 42 ATMs under this initiative so far. Out of total 502 braches, 200 branches of ZTBL are located in underserved / underdeveloped banking areas.
This initiative has provided 24/7 access (to finances/loans limits) to the populous of these underserved areas with comfort and ease. Acquisition of 1-Link Membership and collaborating with Pay Pak has added multifold to efficient and cost effective service delivery to rural populous of underdeveloped areas, as ZTBL's debit cards are functional at any other ATMs services provider across the country.
Adding further to the upscaling / business model innovation and owing to the concerted efforts of Sheikh Aman Ullah - Acting President, the Bank has actively launched its Islamic Banking Operations in January 2019, after been granted Islamic Banking license by State Bank of Pakistan. With this initiative, ZTBL has become the first and only bank, at present, in the country offering Sharia compliant banking and financing services to farming community of the country. This initiative envisages to be proven a milestone in coming years in agriculture financing & development and will lead to accomplish great Financial Inclusion goals.
Another area, which has shown great progress within a year, under the current leadership of ZTBL, is enhanced outreach and access of farming community to foreign remittances. ZTBL has been servicing as sub-agent for Western Union Money Transfer Services since past 15 years. With the vision and efforts of Acting President, ZTBL is now going to launch its own inward remittances company under Pakistan Remittance Initiative.
Further adding to the effectiveness of this initiative, the clients will be offered with ZTBL debit cards to ensure greater financial inclusion goals in under developed areas. The beneficiaries are informed through mobile messages "Mobile SMS Services" for their remittances and subsequently regarding other banking and financing services of ZTBL.
Another stellar achievement by ZTBL, under the current leadership is establishment of collaboration with provinces through joint venture arrangements under the Bank's Public-Private Partnership Programme. Low cost delivery with ease of access to finance and reducing the financial burden on small farmers' are two of the key features of this programme.
Accordingly, ZTBL has entered in joint venture with Government of Punjab's E-Credit Scheme. This scheme has proven to enhance low cost services delivery largely. Since past one year the scope of this scheme is enhanced with Rs. 13 billion been disbursed as agriculture credit to 110,000 borrowers/farmers. Mark-up free loans are extended under this scheme, with special features of financial and digital inclusion, while the mark up is borne by the provincial government. There are no defaults under this scheme as the borrower is made aware that incase of default, he will be liable to pay the mark up as well.
Similarly, through rigorous efforts of Acting President, ZTBL has launched Poverty Reduction Scheme for Azad Jammu & Kashmir area. This scheme is operational and under this scheme, ZTBL will finance 300 small dairy units, under markup free loan extension to the borrowers. The markup liability will be borne by the Government of AJK.
Working on the same lines, an MOU is signed with the Gilgit - Baltistan Government for provision of loans for, dairy farming, yak farming, sheep farming, goat farming and poultry farming to small farmers of the area. This scheme envisage to save Rs. 17 billion expenditure of Government of Gilgit - Baltistan incurred on acquiring these items from other parts of the country and will be proven another milestone in country's agriculture and livestock sector. In addition, this initiative envisage leading a great deal towards poverty reduction and self-employment generation opportunities for the populous of the area. Markup free loans will be offered with the markup liability be borne by the Government of Gilgit-Baltistan.
Another, milestone under the present leadership of the Bank is collaborating with Government of Balochistan for Balochistan Green Tractor Scheme, under joint venture arrangement. Balochistan is highly underserved in terms of agriculture financing and other banking services in general. This initiative envisage to make ZTBL a lead bank in extension of banking of financing services to the farming community of the area. Markup free loans for financing of tractors will be extended under this scheme.
Another progress to ZTBL's operations, attributed to the vision of Sheikh Aman Ullah, Acting President is an initiative known as "Diversification of Loan Portfolio". Under this initiative, the development of economic opportunities and development of synergies for small / marginalized farming community, which will enable them to become an active part of agriculture supply and value chains, is envisioned by the leadership of ZTBL.
This initiative, with its gradual complete implementation, envisage to revolutionize the approach to agriculture finance in the country by subsequent development of easily accessible, low cost, self/internal cash flow generating financial streams for all agri-supply and value chains partners, keeping the small farmer centric approach.
Accordingly, under this initiative the Bank will extend financing facilities for i) small oil extracting units; for promotion of oil substitution crops i.e. Canola, Soybean, Sunflower, Mustard and Olive, ii) Financing for Silo (Crop warehousing facilities construction), iii) financing for Milk Chilling Units to promote standardized dairy supply chains, iv) Horticulture and establishment of Green Houses/Tunnel Farming, v) Financing for Three Wheeler Loader Rickshaw to promote farm transportation chains, and vi) Financing for Silage Bailor, for promoting silage making.
All these initiatives envisioned and undertaken by the current leadership of ZTBL, during this last one-year period are anticipated to serve the farming community with focused approach, especially safeguarding the economic viability of small/marginalized farmers of the country.
It is highly anticipated that this approach and methodology will lead to the development of a self-sustaining eco-system in agriculture financing for ZTBL and country's agriculture financing services industry, where farming community will ultimately be benefited by internally generating low cost cash flow streams harnessing maximum benefit in terms of best practices inculcation, higher yields and raised farm profitability.
Copyright Business Recorder, 2019
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