Pakistan's agriculture sector reported impressive growth during the fiscal year 2024. However, the pace slowed in the first quarter of 2025, with agricultural growth reducing to 1.2% from the previous year's 8.1%. This slowdown has contributed to a deceleration in GDP growth, which dropped to 0.9% in Q1 2025 from 2.3% in the same quarter the previous year. The State Bank of Pakistan disclosed these figures during the recent Agricultural Credit Advisory Committee (ACAC) meeting held in Multan, pointing to a modest wheat crop and underscoring the need for resilience and innovation to sustain growth in the sector.
Governor of the State Bank of Pakistan, Jameel Ahmad, emphasized the crucial role of agriculture in Pakistan's economy. He noted the sector's pivotal contributions to food security and rural livelihoods and its interconnection with the industrial and services sectors. Despite these contributions, challenges such as low productivity, the impact of climate change, and limited financial inclusion persist. Mr. Ahmad called on banks to consider agricultural finance as a core and viable business line.
During 2024, collaborative efforts between the State Bank of Pakistan and banks led to a record credit disbursement of Rs. 2,216 billion ($7.83 billion), a 25% increase from the previous year. The momentum continued into the first half of 2025, with disbursements totaling Rs. 1,266 billion ($4.44 billion) and a modest increase in the number of borrowers to 2.86 million. The Governor highlighted the importance of expanding bank presence in rural areas, urging banks to open more branches dedicated to agriculture lending and to deploy additional agricultural credit officers.
Looking forward, Mr. Ahmad urged banks to fully implement their Agricultural Credit Expansion Plans and to invest in human resources, infrastructure, and digital technologies to better serve farmers. He called for cooperation among financial institutions, government departments, fintech companies, microfinance institutions, and Agri-Tech companies to provide end-to-end digital loan solutions and advisory services tailored for small farmers.
