SBP boosts farm loans to Rs1.4tr in H1FY26

February 12, 2026 (MLN): Pakistan’s agricultural sector received Rs1.41 trillion in credit during the first half of FY26, with the number of borrowers reaching 2.97m, the State Bank of Pakistan (SBP) said at its Agricultural Credit Advisory Committee (ACAC) meeting in Karachi.

This follows a record Rs2.58tr in agricultural loans disbursed in FY25, showing a 16% year-on-year increase.

Governor SBP Jameel Ahmad highlighted agriculture’s critical role in improving farm productivity, supporting rural livelihoods, and ensuring food security.

He noted that Pakistan’s economy has regained macroeconomic stability, with real GDP growth reaching 3.7% in Q1-FY26 and full-year growth projected in the range of 3.75–4.75%, according to the press release. 

Headline inflation moderated to 5.8% by January 2026, allowing monetary policy to support growth while remaining anchored in price stability.

The external account remains broadly contained due to prudent policies, resilient remittances, and stable commodity prices.

To accelerate borrower expansion, particularly among small farmers in underserved areas, the Governor urged banks to fully leverage SBP’s initiatives, including the Risk Coverage Scheme for Small Farmers and Underserved Areas, and Zarkheze, SBP’s digital platform for agricultural lending.

Zarkheze enables digital onboarding of farmers, standardized credit assessment, integration with land and crop information, and end-to-end traceability of loans, while ensuring financing is utilized for quality agricultural inputs through a connected vendor network.

The Governor emphasized that Zarkheze should be scaled up as a core delivery channel, making small-ticket lending commercially viable and expanding outreach beyond traditional high-volume regions.

Banks were urged to ensure timely processing of applications, strengthen internal ownership of the scheme, and further develop the vendor ecosystem to improve farmers’ access to certified inputs and embedded advisory services.

The meeting also reviewed the development of an upgraded crop loan insurance framework, CLIS+, under the ADB-funded Pakistan Insurance Transformation Program.

The scheme aims to expand crop coverage, establish an insurance consortium for improved risk-sharing and farmer payouts, introduce technology-based calamity assessments, and enhance protection through loss-of-income support.

The ADB Solidarity Fund will also support extending coverage to non-borrowing farmers and aid in the development of a National Insurance Policy for Agriculture.

Electronic Warehouse Receipt Financing (EWRF) was discussed as a tool to improve post-harvest liquidity, reduce distress sales, and strengthen agricultural market linkages.

The Committee highlighted the need to expand accredited warehousing infrastructure and increase bank participation in EWR-based financing to support farmers more effectively.

Governor Ahmad outlined the banking sector’s priorities for the sector, stressing the importance of expanding borrower outreach, particularly through microfinance banks and small-ticket products.

He called for deepening financial inclusion by providing productivity-enhancing credit to subsistence and small farmers, and diversifying the geographical coverage of agricultural finance to underserved areas.

Banks were urged to fully implement their Agricultural Credit Expansion Plans for FY26, coordinate with provincial authorities for digitization of land records, and form partnerships with fintechs, agri-tech firms, and microfinance institutions to improve accessibility and inclusion.

The ACAC continues to serve as a strategic platform under SBP’s leadership, bringing together financial institutions and key stakeholders to advance agricultural finance as a driver of inclusion, productivity, and long-term economic resilience.

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