State Bank of Pakistan (SBP) has enhanced the indicative credit limits for agriculture financing by banks to farmers.
According to the sources of the State Bank of Pakistan, “The enhanced indicative credit limits for production and development loans of farm and non-farm sector will directly benefit agriculture borrowers who will now be able to obtain more credit from banks and in turn, enhance agriculture productivity through adequate use of inputs.”
All crops’ limits have been enhanced.
- The per acre limit of rice has been enhanced to Rs 70,000 for 2022 which was Rs 45,000 per acre in 2019
- The wheat per acre indicative price increased to Rs 60,000 per acre in 2022 which was Rs 40,000 in the year 2019
- The indicative price per care of cotton was increased to Rs.75,000 in 2022 which was Rs 52,000 in 2019
- The limit for sugar is now Rs 105,000 which is Rs 73,000 in 1019
- The credit limit for maize (hybrid) is Rs 78,000 per acre which was Rs 55,000 in 2019
- For maize, it is Rs 65,000 which was Rs 45,000 in 2019
Read more: Banks miss agriculture credit target, rises 12% year-on-year
The per acre indicative credit limits for these crops and other minor crops have been calculated using the estimation methodology.
The bank will be able to use these limits to estimate the credit requirements of each customer. The banks may use these limits for premium claims of the Crop Loan Insurance Scheme (CLIS) and variation from these limits will be justified in the CLIS premium claim formats accordingly.
Banks may also align the loan amounts with the actual requirements of customers and consequently increase the flow of agriculture credit.
The indicative credit limits are the guideline for banks to assess the credit requirements of agriculture borrowers at the time of giving the approval of credit limits. These limits will also help planning departments in estimating the total financial and credit requirements of concerned provinces/regions for farm and non-farm sectors.
Syed Fakhar Imam, the Federal Minister for National Food Security and Research while presiding over a meeting In Islamabad on Wednesday told the Ministry of Finance and State Bank of Pakistan to formulate a clear roadmap on the enhancement of agriculture credit to farmers.
According to the State Bank of Pakistan, the notification of the Agriculture Credit Advisory Committee (ACAC) has been done by the federal government to monitor the credit targets.