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ISLAMABAD, Nov 04 (APP):Pakistan’s banking sector disbursed a total of Rs2.58 trillion in agricultural loans during the fiscal year 2024-25, surpassing its annual target. This achievement follows the State Bank of Pakistan’s (SBP) new initiatives to expand credit access for small farmers and boost financial inclusion in the rural economy.
According to documents from SBP’s Agriculture Credit and Financial Inclusion Department, the Rs2.58 trillion disbursed represents 100.2 percent of the annual target, marking a significant year-on-year growth of 16.3 percent from Rs2.22 trillion in FY24.
The SBP noted that it has worked closely with banks and other stakeholders under the Agriculture Credit Expansion Plans (A-CEPs) to improve financing flows into the farming sector. Currently, 47 financial institutions are providing agricultural loans, including large commercial banks, medium and small-sized commercial banks, Islamic banks, specialized banks, microfinance banks, and rural support programs.
At the end of June 2025, the outstanding portfolio of agricultural loans reached Rs995.3 billion, up by 13.8 percent from Rs875 billion the previous year. The number of active borrowers also grew by 7.3 percent to 2.9 million, reflecting an expansion of financial outreach to rural areas.
Punjab remained the leader in agricultural credit distribution, receiving Rs2,045.1 billion, which accounted for 103.6 percent of its A-CEP+ target. Sindh followed with Rs453.4 billion (93.1 percent), while Khyber Pakhtunkhwa secured Rs55.2 billion (68.9 percent). The remaining provinces, including Balochistan, Azad Jammu and Kashmir, and Gilgit-Baltistan, received a combined Rs23.6 billion.
Among financial institutions, five major commercial banks led the disbursements, providing Rs1,442.3 billion, or 108 percent of their target. Specialized banks, such as Zarai Taraqiati Bank Ltd and Punjab Provincial Cooperative Bank Ltd, collectively lent Rs85.6 billion, achieving 81 percent and 119 percent of their respective targets. Microfinance banks and microfinance institutions also performed strongly, disbursing Rs252.3 billion and Rs30 billion, meeting 102.9 percent and 95.3 percent of their targets.
The farm and crop sector received Rs1,443.8 billion, accounting for 56 percent of total disbursements, a 19.3 percent increase compared to the previous year. The non-farm sector, including livestock, poultry, and agri-services, was allocated Rs1,113.4 billion, or 44 percent of the total, reflecting a 12.8 percent rise year-on-year.
To further support agricultural financing, SBP, in coordination with federal and provincial governments, launched several targeted schemes. The Risk Coverage Scheme for Small Farmers and Underserved Areas offers first-loss coverage of up to 10 percent to banks providing credit to small farmers, alongside a Rs10,000 subsidy per borrower to offset onboarding costs. This scheme is expected to generate Rs100 billion in new loans annually, bringing 250,000 new farmers into the formal credit system each year, totaling Rs300 billion in financing over its duration.
The National Subsistence Farmers Support Initiative introduces digital, collateral-free financing for smallholders through integrated bank portals, expanding access for landless and subsistence farmers.
The Prime Minister’s Youth Business and Agriculture Loan Scheme (PMYB&ALS) has also made notable progress, achieving 100 percent of its targets in its first two phases. By June 2025, banks had disbursed Rs32 billion through 20 partner institutions, with the FY26 allocation raised to Rs65 billion.
The Electronic Warehouse Receipt Financing (EWRF) system, launched in 2022, continues to grow. It enables farmers, traders, and processors to obtain loans against stored commodities in accredited warehouses without conventional collateral. In FY25, Rs1.996 billion was disbursed to 518 borrowers under the EWRF, bringing total financing through the scheme to over Rs10 billion since its inception.