Banks in Pakistan to issue more loans this year to support agriculture, SMEs

The State Bank of Pakistan (SBP) Governor Jameel Ahmad revealed that banks will significantly increase loan issuance this year to support the agriculture and small and medium-sized enterprise (SME) sectors.

The Governor’s address highlighted substantial improvements in Pakistan’s macroeconomic conditions. Ahmad reported a major decrease in inflation, which fell to 11.1 per cent in July 2024, down from 28.3 per cent in July 2023.

He also pointed out a remarkable reduction in the current account deficit, which had been $17.48 billion in fiscal year 2022 but dropped to $3.2 billion in fiscal year 2023 and further to $0.68 billion in fiscal year 2024.

Foreign remittances have risen to $30.25 billion in fiscal year 2024, an increase from $27.33 billion the previous year. Meanwhile, foreign reserves have improved to $9.3 billion despite ongoing debt repayments.

Governor Ahmad noted that there are no restrictions on imports and highlighted a significant rise in IT exports, both of which are positive signs for the economy.

These improvements, according to the Governor, are the result of effective policies by both the government and the SBP. He outlined several initiatives designed to enhance financial inclusion, including the National Financial Inclusion Strategy, the National Financial Literacy Program, and Banking on Equality.

He also praised ‘Raast,’ Pakistan’s new instant payment system that allows for quick digital transactions between individuals, businesses, and government entities. Additionally, the Asaan Mobile Account service enables people, particularly those from low-income backgrounds, to open digital branchless banking accounts.

The SBP has made efforts to inform the public about these digital financial services through its field offices and commercial banks, focusing on services such as Raast, QR Codes, Asaan Mobile Accounts, and Asaan Digital Accounts.