Clean financing for agri sector enhanced to Rs5m

The State Bank of Pakistan (SBP) has amended the Prudential Regulations to facilitate the banks to enhance the flow of credits to the farm and non-farm sectors. The central bank on Monday increased the maximum limit of unsecured or clean financing for agriculture from Rs1 million to Rs5m. “It has been decided to make the amendments in Prudential Regulations for Agriculture Financing to enable banks and DFIs to enhance the flow of credit to farm and non-farm sectors,” said the SBP in a circular. On Aug 26, the SBP assigned an annual agriculture credit disbursement target of Rs1,800 billion to the financial institutions for FY23 to cater to the agriculture credit demand in the country. Furthermore, in line with national food security requirements and the need for farm mechanisation to boost agriculture productivity, specific targets of Rs140bn for wheat crop production loans, Rs45bn for tractor financing, and Rs20bn for financing harvesters, planters, and other farm machinery have been set under the overall target for FY23.