Bank Financing Towards Green Environment Establishment of Fruit Farms. Development of a new Bank Lending Product.

Abstract

Various economists have different views about the role of commercial banks in economic development of an economy. Schumpeter says, “It is the banking system which serves as a key agent along with the entrepreneur in the process of economic development”. According to Prof. Cameron in his “Banking and Economic Development”, “a banking system may make a positive contribution to economic growth and development.” Bank lending plays a vital role in the economic development of an economy especially for underdeveloped countries like Pakistan. The study examined the association among banks credit to private sector and economic growth in Pakistan. Economic growth was taken as dependent variable, while bank credit to private sector, interest rate, inflation, investment to GDP and government consumptions were taken as independent variables. Secondary data were collected from World Bank Indicator, ranging for the period 1973 to 2013. Descriptive research and correlation were used to check the normality of data. Unit root test was used to check the stationarity of variables. Co-integration VECUM and Granger Causality test were statistically used to test the variable relationship and causality effect of the variable. Regression analysis was used to analyze the impact of bank credit on economic growth. The findings of the study showed that bank credit had extensive relationship with economic progression; in short term the relationship was also significant. Regression analysis showed that there was adverse impact of bank credit on economic growth in Pakistan. However, problem associated with bank credit facility is the constraint and regulation imposed by SBP on the percentage of credit to be given to the Entrepreneurs. For solitary in the meantime bank lending has a casual influence on economic growth, there is a policy need to give devotion to liberalization the monetary sector. On the other hand, according to the 2020 edition of the environmental performance index (EPI) ranking released by Yale Center for Environmental Law & Policy, Pakistan ranks 142 with an EPI score of 33.1, an increase of 6.1 over a 10-year period. It ranked 180 in terms of air quality. The climatic changes and global warming are the most alarming issues risking millions of life across country. The major reasons of these environmental issues are carbon emissions, population explosion, and deforestation. These are serious environmental problems that Pakistan is facing and they are getting worse as the country's economy expands and the population grows. Although some NGOs and government departments have taken initiatives to stop environmental degradation, Pakistan's environmental issues still remain. This business project is based on the development of a new banking lending product that will gear up circulation of money in the economy, leads to economic development, will generate various direct and indirect jobs and the main benefit is that it will blowout a green environment in the Terrestrial of Pakistan that will also enable to overcome the threats of climate changes in PAKISTAN.