SBP launches facility for commodity storage

The State Bank of Pakistan has launched a new financing facility for storage of agricultural produce.

KARACHI: The State Bank of Pakistan (SBP) has launched a new financing facility for storage of agricultural produce to encourage the private sector to set up silos, warehouses and cold storages which will reduce post-harvest losses.

This will enhance the quality of storage capacity of food grains, fruits and vegetables, fish, fish products and others, said the central bank in a press release on Friday.

The SBP said financing under the scheme will be available through banks or development financial institutions (DFIs) at markup rates of eight to 10 per cent for a maximum period of seven years.

Banks and DFIs can provide financing up to Rs500 million for a single project under the scheme, which will be valid up to December 31, 2012. However, they may provide financing facilities over and above the maximum limit from their own sources, keeping in view their internal policies.

The agriculture sector faces a shortage of modern infrastructure and market structure. On the infrastructure side, there is a lack of proper warehousing and storage facilities whereas on the market side there is a shortage of testing, collateral management, commodity financing and trading facilities.

The central bank said in order to introduce modern storage, marketing and post-harvest financing facilities for agricultural commodities, the SBP is working along side other key stakeholders.

Published in the Express Tribune, June 5^th, 2010.