SBP and the Pakistan Banks Association (PBA) are joining forces to strengthen Pakistan’s economy by increasing financing for agriculture, small and medium businesses (SMEs), and digital technologies.
Commercial banks across the country will be required to develop plans to significantly expand their lending portfolios in these sectors over the next five years. This aims to achieve a trillion rupees outstanding in agricultural financing and double funding for SMEs by June 2025. Increased access to credit is expected to boost entrepreneurship, job creation, and overall economic growth, especially at the local level.
The SBP is also pushing for a digital transformation within the banking sector. This includes encouraging banks to adopt new technologies for digital payments and develop lending platforms specifically designed for underserved populations in agriculture and SMEs. The ultimate goal is to not only improve access to financial services but also reduce the amount of cash in circulation, leading to lower inflation and interest rates.
The PBA outlined several initiatives to support these goals, including developing performance indexes for both sectors, promoting electronic warehouse receipt financing, and establishing services to boost e-commerce. Additionally, they plan to install cash deposit machines and develop virtual prepaid card solutions to encourage digital transactions. A dedicated fund will also be set up to support fintech companies developing solutions for reducing cash circulation and improving financial access for farmers and SMEs.
The Governor of SBP emphasized the importance of collaboration between the Central Bank and PBA in ensuring long-term access to financial services for these critical sectors. This initiative, overseen by the Finance Minister himself, is expected to foster inclusive economic growth and create a more robust and competitive banking industry in Pakistan.
