Banks plan to support agriculture, SMEs with increased lending

WEB DESK: In his Independence Day address, State Bank of Pakistan (SBP) Governor Jameel Ahmad announced that banks are planning to issue more loans this year to support the agriculture and small and medium-sized enterprise (SME) sectors. This initiative is part of broader efforts to strengthen Pakistan’s economy.

The Governor’s speech, delivered by Executive Director Muhammad Haroon Rasheed, highlighted notable improvements in macroeconomic indicators. Ahmad noted a significant reduction in inflation, which fell to 11.1 per cent in July 2024 from 28.3 per cent in July 2023.

Governor Ahmad also reported a dramatic decrease in the current account deficit, which was $17.48 billion in fiscal year 2022 but had decreased to $3.2 billion in fiscal year 2023 and further to $0.68 billion in fiscal year 2024.

Additionally, foreign remittances have risen to $30.25 billion in fiscal year 2024, up from $27.33 billion the previous year. Foreign reserves have also improved, reaching $9.3 billion despite ongoing debt repayments.

The Governor emphasised that there are no current import restrictions and noted a significant rise in IT exports, both of which contribute positively to the economic outlook.

These economic improvements are attributed to effective measures by both the government and the SBP. The Governor outlined various initiatives aimed at enhancing financial inclusion, including the National Financial Inclusion Strategy, the National Financial Literacy Program, and Banking on Equality.

He also highlighted ‘Raast,’ Pakistan’s first instant payment system, which facilitates seamless digital transactions between individuals, businesses, and government entities. Additionally, the Asaan Mobile Account service enables individuals, especially those from low-income backgrounds, to open branchless banking accounts digitally.

The SBP has also provided information on digital financial services through various channels, including its field offices and commercial banks, to educate the public about services such as Raast, QR Codes, Asaan Mobile Accounts, and Asaan Digital Accounts.

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