Rabobank Group

Rabo Development signed a contract with the State Bank of Pakistan. The project is sponsored by the Asian Development Bank (ADB). The parties have agreed that Rabo Development will support six Pakistani banks over the next two years to establish or improve their agricultural lending operations. The project forms part of the ADB Agribusiness Finance Capacity Building Project that is being leveraged by the Pakistani government to provide renewed impetus to the nation’s employment and economic growth by further developing its agricultural sector. Pakistan is an emerging economy in which the agricultural sector currently accounts for approximately 23% of the county’s GDP, while nearly 45% of Pakistan’s workforce is employed directly in agriculture.

Limited access to finance via the banking sector constitutes one of the main obstacles to achieving further growth of the agricultural sector. While Pakistan does have a well-functioning banking sector, there continues to be a lack of specialised knowledge relating specifically to agriculture and agricultural finance. As a result, agricultural finance is considered to be high risk and exposure to this sector is limited. In view of the high market demand for financial services, one of the main focal points of the Capacity Building Project will be to strengthen the supply side of finance.

In the coming months, Rabo Development will work with its Pakistani counterparts to determine the specific assistance that will be required for each bank. Separate Technical Assistance (TA) projects will then be drawn up that are tailored to the specific needs of each bank. Implementation of the project will be done in close co-operation with RI India, who also supply expertise to the project.