Sajid Irfan

The State Bank of Pakistan (SBP) has announced Rs1.8 trillion loans for farmers to boost the agriculture sector of the country, WealthPK reports. Pakistan is an agricultural country and its economy largely depends on agriculture as the share of the sector in the Gross Domestic Product is almost 24%. About 42% of the labour force in the country is associated with the agriculture sector.

The assistance provided to farmers by the government and non-government organisations can play a vital role in the development of the agriculture sector. The development of the agriculture sector can put a positive impact on the overall economy of Pakistan.

Inamullah Khattak, the spokesperson for Zarai Tarkiyati Bank Limited (ZTBL), told WealthPK that ZTBL was a major contributor to empowering the farmer of Pakistan. He said that 78% of Pakistani farmers were financially supported by ZTBL. SBP agricultural loans are announced every year and distributed through commercial banks. The initiative is meant to boost the agriculture sector.

According to official documents of SBP, the central bank of the country has set the annual agriculture credit disbursement target of Rs1,800 billion for the financial institutions for the current fiscal. Pakistan is in dire need of food security and enhanced agricultural productivity.

The loans are awarded to farmers under different categories. SBP has set the limit of Rs140 billion loan for the wheat crop, Rs45 billion for tractors and Rs20 billion for financing harvesters and planters. The SPB documents say that during the previous fiscal, the financial institutions managed to disburse Rs1,419 billion to the agriculture sector, showing an increase of 10% as compared to Rs1,366 billion disbursed during the financial year 2020-21.

The limited loans and limitations imposed on banks as well as on borrowers result in a decrease in agricultural production. The policymakers need the availability of accurate and timely statistics regarding important crops such as wheat, cotton, rice, sugarcane and maize, etc.

“SBP has instructed all the financial institutions to finance the country. For this purpose, SBP has introduced a scoring model to gauge the agriculture credit performance of the banks,” say the documents.

Muhammad Khizar, a framer in Khyber Pakhtunkhwa, said that he had taken a loan of Rs700,000 in the previous year for the wheat crop. He said that he made a profit of Rs500,000 after harvesting the yield and selling wheat. He said that he was willing to avail the opportunity of getting a loan again.

Muhammad Khan, another beneficiary of the scheme, said that he got a loan of Rs1 million and earned Rs300,000 after the harvest of the crop. “I am ready to get a loan again for my agricultural land,” he told WealthPK.

Credit : Independent News Pakistan-WealthPk