The funding will allow HBL, the largest bank in Pakistan, to increase badly needed financing for the country’s smallholder farmers and agribusinesses.
British International Investment (BII) is providing a $75m (€69m) finance facility to HBL, Pakistan’s largest bank, to help provide farmers and agribusinesses with greater access to finance that will allow them to adopt sustainable practices, enhance climate resilience, and improve yields and incomes.
The agricultural sector accounts for around a quarter of Pakistan’s GDP and employs over a third of the workforce, but limited access to finance means farmers are unable to buy modern equipment and often lie at the end of poorly developed value chains, according to the UK development finance institution.
“By increasing access to essential finance and promoting climate adaptation measures, this partnership aims to address critical challenges in the sector, ensuring sustainable growth, improved livelihoods, and food security for the nation,” Habib Yousuf, BII’s regional director for South Asia, said.
HBL plans to use the facility to expand its agriculture portfolio, with 50% of the funding to be allocated to the smallholder farmers that constitute more than 90% of Pakistan’s farming population.
Strengthening value chain
Funding will also be directed towards strengthening businesses throughout the agricultural value chain, including production and logistics. Some will also be used to promote the use of solar-powered irrigation systems and other climate adaptation initiatives that will help farmers improve their resilience to environmental challenges and reduce greenhouse gas emissions.
Maya Inayat Ismail, chair of HBL’s Sustainability Forum said the partnership with BII would strengthen the bank’s efforts to help farmers mitigate risks from climate change, and ensure financial security and long-term resilience, through climate-smart financing and yield insurance programmes.
HBL, formerly known as Habib Bank, was the first commercial bank to be established in Pakistan in 1947. A subsidiary of the Swiss-based Aga Khan Fund for Economic Development (AKFED), it remains the largest private sector bank with over 1,700 branches and 2,000 ATMs globally.
BII has been investing in Pakistan for more than 35 years, with much of the financing directed towards agriculture, poverty alleviation, infrastructure and renewable energy projects.
In August 2024, Impact Investor reported from Pakistan on the work of the Kashf Foundation, a women-focused microfinance institution that BII has supported, along with other DFIs. BII also announced last September that it was committing $50m to Pakistan Telecommunication Company (PTCL) as part of a $400m total financing package led by IFC. That funding helped PTCL to make acquisitions expected to boost investment in digital infrastructure, especially in underserved regions.
The UK institution has also been active in the agricultural sector elsewhere in the developing world over recent weeks, notably Africa. Earlier this year, BII said it would provide $40.5m of debt financing to Nigerian coca processor Johnvents to support expansion and boost exports, as well as committing $100m to KCB Bank Kenya in support of lending to climate-related projects, including in agriculture.
BII also made a $50m investment in AgDevCo, an investor in sub-Saharan African agribusinesses, as part of a total $85m package to which Norfund and Swedfund also contributed.
