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LAHORE, October 4, 2026: Inadequate insurance, a shortage of accredited warehouses and limited access to finance are major barriers to agricultural lending in Pakistan, State Bank of Pakistan Deputy Governor Salimullah said.
Speaking at the Pakistan Agricultural Coalition’s Agri-Connections Conference and Expo at Lahore Expo Centre, Salimullah said agriculture remains one of Pakistan’s most important economic sectors.
However, he said structural problems continue to restrict financing for farmers. He made the remarks during a session titled “Building the Access to Finance Ecosystem for Pakistan’s Farmers.”
Salimullah identified inadequate insurance coverage as the first major constraint.
He said farmers face significant risks, while limited insurance protection makes banks more cautious about agricultural lending.
“Effective insurance coverage is a key issue for both farmers and banks,” he said.
According to the deputy governor, stronger insurance mechanisms could reduce risk for financial institutions. They could also help farmers gain easier access to formal credit.
The availability of accredited warehouses was another major concern.
Salimullah said much of Pakistan’s agricultural value chain remains informal. As a result, banks have limited confidence that they can maintain control over commodities used as security.
He said accredited storage facilities could improve transparency across the agricultural supply chain. Such infrastructure could also give banks greater confidence when financing farmers and agricultural businesses.
Access to finance itself remains the third major constraint, Salimullah said.
The State Bank is working to develop an ecosystem that can make agricultural lending a viable business proposition for banks.
Better risk management, stronger infrastructure and improved financial access could therefore help expand formal lending to the sector.
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Meanwhile, Gulf investors are showing early interest in Pakistan’s meat-processing industry.
Speaking during a session on “Investment Successes in Livestock,” Omar Sagga, chairman of Jeddah-based Taraf, said Pakistan has significant potential in the sector.
He pointed to the country’s human capital and livestock resources as key advantages.
However, Sagga stressed that investor interest alone does not guarantee investment. He said Pakistan needs an ecosystem that gives investors sufficient confidence to commit capital.
Pakistan Dairy Association Chairman Usman Zaheer Ahmed highlighted the scale of Pakistan’s dairy industry.
He said Pakistan produces around 72 billion litres of milk annually and ranks among the world’s largest milk producers.
Ahmed said formalising even half of the informal dairy sector could significantly increase government revenue.
He estimated that a minimum five per cent tax could generate around Rs250 billion annually. Full formalisation, he added, could potentially generate close to Rs500 billion in government revenue.
Technology and mechanisation also featured prominently at the conference.
Jehiel Oliver, chief executive of Kenya-based Hello Tractor, discussed ways to expand farmers’ access to agricultural machinery in Pakistan.
He said public programmes such as the Green Tractor scheme and local manufacturers, including Al-Ghazi and Millat, were supporting agricultural mechanisation.
Oliver also outlined a model that connects farmers with equipment owners who have unused machinery capacity.
The approach allows farmers to access modern equipment without purchasing it themselves.
He argued that farmers need reliable and affordable machinery, but ownership is not always necessary. Shared access, he said, can reduce costs and improve the use of farmers’ financial resources.
The conference also featured a session on building the foundation for Pakistan’s shrimp exports.
Another roundtable brought investors together with representatives of the Securities and Exchange Commission of Pakistan (SECP) to discuss investment opportunities in agriculture.
At the conclusion, PAC Chief Executive Kazim Saeed presented the conference resolutions and a call to action.
The discussions highlighted the need for stronger agricultural finance, better infrastructure, investment-friendly policies and greater use of technology to unlock Pakistan’s farm-sector potential.
[…] SBP Deputy Governor Identifies Insurance and Warehouses as Key Barriers to Farm Lending […]