Ahmed Khan Malik 

The Sindh government has introduced a scheme to financially support the small farmers facing problems in accessing agriculture credit from commercial banks. 

Talking to WealthPK, Mumtaz Jamali, Director of Sindh Agriculture Department, said under the scheme, maximum financing was up to Rs200,000 for small farmer group (SFG) on mark-up on the basis of Kibor (Karachi Inter-Bank Offered Rate).  “Under this scheme, banks shall not charge any penalty on early repayment/adjustment of loan,” he said. SFG were groups comprising 5-15 small farmers or low-income people of rural areas involved in agriculture, livestock, poultry, fisheries, sericulture, apiculture or other agri-related activities and cannot provide any collateral acceptable to banks, he added. Jamali pointed out that the eligibility criteria to become a member of SFG was that an individual should be a holder/tenant/lessee/allottee of land up to 12.5 acres (in case of crop sector) and individuals with sufficient knowledge of the business/activity being carried out. He said that efforts would be made to increase the agricultural sector growth to 4-5% per annum.

This is a necessary to raise incomes, reduce poverty and food insecurity, provide decent employment, particularly to the large numbers of youth entering the labour market, and facilitate a greater attention to sustainability. “Future growth in agriculture, livestock and fisheries must come from improving efficiency and productivity,” he said. Jamali said that the agriculture credit meant any facility (both fund and non-fund-based) allowed to any person, firm or company for agricultural production/development/grading/polishing and storage of agricultural produce, etc. He said that it included lending for forestry, forticulture, fish farming, dairy farming, poultry farming, lending to agriculture value chain, export of agricultural goods or for any other purpose declared eligible by the State Bank of Pakistan. He said that the agri loan in some areas was only Rs3 billion annually, which was very low compared to the needs of the province. 

Jamali said that agri loan product was designed to facilitate farming community in obtaining agricultural production loans to meet working capital needs of agriculture farming. “Production loan means the amount disbursed for the purpose of sowing, producing, growing, harvesting and marketing of crops, vegetables, fruits, etc. and may include the cost of input/charges to be incurred on the acquisition of the material and services.” 

Credit: INP-WealthPk