Revising agri-loans to assist small farmers

The agriculture sector contributes 20.9% to the GDP and provides employment to nearly 44% of the workforce. According to the economic survey of Pakistan, the agriculture sector has four sub-sectors; crops, livestock, fisheries and forestry.

Farmers use credit vehicles to finance inputs in time and small famers particularly use it as a tool to enhance productivity. Agricultural Credit includes intermediate, short-term and long term credit for operating expenses, machinery use and land development.

A survey conducted by Agriculture University in Faisalabad identified various constraints reported by the borrowers in obtaining loans. The report highlighted that the :

1. Procedure of obtaining loans was lengthy and cumbersome.
2. Interest rate was too high.
3. Borrowers were not satisfied with the behavior of concerned officials
4. There were issues pertaining to loans not being given on time
5. Repayment procedures were rigid

Government-urges1

Suggestions were made to improve credit utilization and minimize problems to enhance productivity for agricultural sector; these included reviewing the use of tools for agriculture credit.

To enhance agricultural growth in the country the State Bank of Pakistan has reviewed the provision of agriculture credit to farmers and reduced the overall policy rate.

The Finance Minister, Senator Muhammad Ishaq Dar urged the public sector financial institutions to review the mark-up rates for agriculture credit.

As a result of this, the heads of National Bank of Pakistan (NBP) and Zarai Taraqiati Bank Limited (ZTBL) assured that they would immediately finalize specific measures for increasing availability of agricultural credit and rationalize markup rates.

In agriculture sector, credit is the backbone and in order to transform subsistence agriculture to commercial the lending factors need to be reviewed in the light of above mentioned issues that the borrowers face.

M.K. Bashir in his research regarding agricultural credit in Pakistan, mentions that Agricultural Credit, in reality, is an integral part of the process of modernization of agriculture and commercialization of the rural economy and unless agriculture credit is systematically institutionalized for small farmers, agricultural development cannot be materialised.

Olagunju,an agricultural expert, further confirms this approach and emphasizes that; “The use of credit facilities would therefore translate to higher resource employment and capacity utilization, increased output and income, and poverty reduction in the rural economy, especially among the farmers and be helpful to increase the food production which would lead to an improvement in the welfare of the farmers.”


News of the day

11 minutes Read 64 views

ATX+PAK Advance GMAP Finalists Announced

May 6, 2019

Ten startup companies to launch accelerated global expansion plans via Austin, Texas

The City of Austin Texas, Innovation District…

View All
6 minutes Read 106 views

Last Day To Apply For A Fully Funded...

April 24, 2019

Today is the last day to apply for the University of Oklahoma Professional Fellows Program for business owners,…

View All
8 minutes Read 249 views

OpenMic, a Nest I/O startup, has launched to...

December 11, 2018

OpenMic, a social startup that engages youth in the conversations about the future of Pakistan, conducted its…

View All
3 minutes Read 235 views

The Khyber Pakhtunkhwa government has launched its first...

December 3, 2018

The policy talks about the the digital aspirations of the province for the next five…

View All
4 minutes Read 309 views

oladoc Launches New and Improved Healthcare App

December 3, 2018

oladoc – Pakistan’s largest digital healthcare network has launched the new and improved version of the…

View All

Latest Videos

1 minute Read 793 views

Saad Mahmood, The Technology Guy

March 13, 2018

Saad Mahmood is currently working at Microsoft.He is Microsoft Most Valuable Professional (MVP) and loves technology. Saad has…

View All
1 minute Read 790 views

Saad Mahmood’s Perspective About Women Empowerment !!

March 8, 2018

Saad Mahmood is currently working at Microsoft.He is Microsoft Most Valuable Professional (MVP) and loves technology. Saad has…

View All
Less than a minute Read 1,479 views

CEO VizRah, Mohammad Adeel Javed, talking about Vizrah...

August 20, 2017

We asked Adeel Javed about his initiative VizRah and how he aims to positively impact the society through…

View All
Less than a minute Read 2,253 views

Yellow Plate Restaurant introducing fast food with unique...

August 10, 2017

Our team visited Yellow plate restaurant at Shah Jamal market Lahore to tantalize our taste buds. The Owner…

View All
Less than a minute Read 1,414 views

Views of Khuram Bukhari (Co-Founder Ravvish) about Life,...

August 10, 2017

We conducted a written dialogue about life and success with Co-Founder Ravvish, Khuram Bukhari

View All