SBP with help of HBL, BOP launches EWRF is Kasur
By Muhammad Sudhir Chadhry
LAHORE: State Bank of Pakistan Tuesday in collaboration with the commercial banks including Habib Bank Ltd and Bank of Punjab and private sector collateral management company launched Electronic Warehouse Receipt Financing (EWRF) for Maize Crop in Habibabad, District Kasur.
The commercial banks signed an agreement with a collateral management company to start operations under the newly developed system. The EWRF will help to improve food security by minimizing post-harvest losses due to unavailability of modern storage spaces alongside ensuring the enhanced credit availability to the farmers. The EWRF will also help in better price discovery that will increase farmers’ profitability and guide in better farming decisions.
The EWRF in the first phase is launched in the four districts including Lahore, Okara, Sheikhpura and Kasur of Punjab with two crops paddy and maize.
Congratulating the banks on initiation of EWRF for maize crop, Governor SBP Dr. Reza Baqir said that banks must now extend credit to the farmers to its full potential and make it easier for them to avail financing as the farmers would now be able to offer banks adequate collateral to avail loans.
The EWRF provides a smooth and reliable process in terms of storage of the produce, receipts creation and provision of credit. The EWRF has created a win-win situation for all the three stakeholders including farmers, banks and the collateral companies, Baqir believed.
He termed the farmers as the key beneficiary since they could now manage the risks emanating from price fluctuation in a better way. Farmers are often forced to sell their crops at lower prices during harvesting season due to unavailability of storage facilities and to meet their pressing cash requirements. With the availability of EWRF, they will now be able to meet their financing needs from banks. EWRF has also created an incentive for establishing modern storage facilities since it will create the demand for such facilities by farmers.
Baqir apprised that SBP has established a high level Taskforce for EWRF, comprising key stakeholders, to develop synergies and address bottlenecks and challenges in availing EWRF. This Taskforce will be responsible to steer the entire action plan, monitor performance, and provide strategic direction to boost EWRF in the country.
At the launch event, key stakeholders including banks also shared their experiences of implementing the emerging EWRF regime, followed by a documentary video focused on creating awareness on EWRF.
President and CEO Habib Bank Limited Muhammad Aurangzeb said that launch of this initiative created a great incentive for banks to extend financing to the farmers. It is the right step towards facilitating the farming community and will help in reaping the massive potential in the agricultural sector to contribute towards the growth of the country.
BOP President and CEO, Mr. Zafar Masud assured continued support of the bank in facilitating farmers. He believed EWRF would not only assist the farmers in their economic well-being but also significantly help avoid post-harvest losses of various crops.
The launch of EWRF is in line with SBP’s efforts to ensure availability of adequate credit for agriculture purposes. In this regard SBP has recently increased credit limits for farmers to meet their input requirements. Earlier, the SBP set agriculture credit target for banks to an all-time high of Rs 1.7 trillion for FY22.
The event was also attended by various stakeholders from federal and provincial governments, CEO Naymat Collateral Management Company Ltd., warehouse operators, and farmers.
Muhammad Sudhir Chaudhry is senior journalist and Special Correspondent of The Freedom. He can be reached at muhammadsudhirch@gmail.com
