Brussels/Karachi, (Unib Rashid) — Kazim Saeed, CEO of Pakistan Agricultural Coalitions, has called on the State Bank of Pakistan (SBP) to issue formal regulations to scale up Pakistan’s Electronic Warehouse Receipt (EWR) regime, following what he described as a successful proof of concept over the past eight crop seasons.

Speaking at the SBP Governor’s Agriculture Credit Advisory Committee meeting, Saeed presented evidence that the EWR system has already demonstrated strong commercial viability and risk performance. Over the past four years, approximately 4,000 electronic warehouse receipts have been issued, covering around $65 million worth of agricultural commodities and facilitating nearly Rs. 8 billion in bank lending — without a single recorded default.

Saeed argued that the time has come for SBP to transition Muqaddam-based and traditional pledge-based agricultural lending into the formal EWR framework through clear regulatory guidance.

“A successful proof of concept has been achieved,” Saeed told the Committee. “The next step is regulatory scaling so that structured warehouse receipt financing becomes the norm rather than the exception.”

He noted that similar regulatory interventions by SBP in the foreign exchange company sector had corrected market distortions, improved transparency, and strengthened financial discipline. A comparable approach in agricultural finance, he suggested, would formalize informal lending channels, reduce credit risk, and enhance supply chain efficiency.

Under the EWR system, farmers deposit commodities in accredited warehouses and receive a digital receipt that can be used as collateral for bank financing. The mechanism improves transparency, preserves commodity quality, enables aggregation, and enhances traceability — all of which are critical for boosting Pakistan’s agricultural exports.

Saeed emphasized that formal regulatory backing from SBP would encourage banks to shift existing pledge portfolios into the EWR regime, stimulate private investment in storage infrastructure, and strengthen Pakistan’s agricultural credit architecture.

He added that scaling up the EWR system would not only expand farmer access to formal credit but also improve collateral quality within the banking system, support export competitiveness, and contribute to broader financial inclusion objectives.

Industry stakeholders present at the meeting acknowledged the importance of developing structured commodity finance solutions as Pakistan seeks to modernize its agricultural value chains and enhance export performance.

The SBP is expected to review the proposal as part of its ongoing efforts to strengthen agricultural financing frameworks and reduce reliance on informal credit mechanisms.