A committee of MNAs was informed on Monday that private sector financial institutions are launching new initiatives and products to expand credit facilities to the agriculture sector.
Detailing the new initiatives, the committee was informed that revolving credit facility was being introduced under which farmers would be charged on actual use basis and there would be flexibility in repayment schedules keeping in view the crop cycles.
On the other end, leasing companies were providing funds and services for leasing of tractors and farm equipment.
In a meeting chaired by Finance Minister Shaukat Aziz and attended by Minister for Food and Agriculture Sardar Yar Muhammad Rind, Minister for State for Food & Agriculture Sikander Hayat Khan Bosan, MNA Jehangir Khan Tareen, Advisor to Punjab Chief Minister for Agriculture Ishaq Khan Khakwani, Sardar Saleem Jan Khan Mazari and Ms. Hina Rabbani Khan.
Representatives from the financial sector informed that a number of measures were underway to expand lending and provide new products of financing to the agriculture sector.
The Deputy Governor of the Sate Bank of Pakistan informed that the agriculture sector's annual demand for finance was Rs 211 billion, which was not being fully met by the financial sector.
As such, the full potential of the agriculture sector could not be realised because of the non-availability of funds for production and development needs. He highlighted that the State Bank had standardised and simplified the documentation for loans.
Representatives of the financial sector like Shaukat Tareen, chairman of the Banking Association, and Bashir Chaudhry, chairman of the Leasing Association, informed the committee that on the encouragement and guidance of the finance minister, private sector financial institutions have developed new financial packages and products for agriculturists, especially for small farmers.
It was informed that the financial sector was now expanding their infrastructure to small towns and rural centres to ensure accessibility of farmers to these facilities.
It was also revealed by Shaukat Tareen that tangible and property collateral loaning was also being extended on communal guarantee basis.
The president of Zarai Taraqiati Bank Limited (ZTBL) informed that after major restructuring and reorganising of the bank, major focus was now to expand its reach to small farmers to meet their production needs.
A number of proposals were presented to the finance minister. The committee asked the State Bank, Banking Association and Leasing Association to look into these proposals which would be beneficial to the process initiated by them.
The ZTBL president was also advised to extend training facilities to the private sector to enhance the capacity for agriculture lending by private sector financial institutions.