Agricultural Loan Scheme Pakistan

The Agricultural Loan Scheme Pakistan is a financial help program launched to enable farmers to meet their agricultural needs. Depending on the need, whether it be crop production, buying equipment, or animal investment, these loans can be short-term, medium-term, or long-term. Under various categories, financial institutions like Zarai Taraqiati Bank Limited (ZTBL), National Bank of Pakistan (NBP), and other commercial banks offer these loans.

How to Get an Agricultural Loan in Pakistan

Are you worried about how to get agricultural loan? Loans are grants given by banks or financial companies to support the agricultural activities of farmers. A farmer who avails of a farming loan scheme must follow the undermentioned simple steps:

• Eligibility: The applicant would be a landowner or a tenant farmer with a valid CNIC. Proof of land ownership or lease agreement in the name of the applicant ought to be maintained in the bank.
• Documentation: The documentation constitutes a copy of the CNIC, documents relating to the land, a passbook (for landowners), and a loan application form.
• Application Submission: Submission can be made either at a nearby bank (that is, ZTBL, NBP, etc.) or, if online portals are available, it can be applied for there.
• Loan Approval: After verification, the loan shall be authorized by the bank concerning repayment capacity and purpose.

Appraisal services are also provided by many banks, helping to guide the farmer throughout the process.

Types of Agricultural Loans Available

Under the Agricultural Loans Scheme Pakistan provides different types of loans:

• Production Loans: For seed, fertilizer, and pesticide purposes.
• Development Loans: For buying tractors, harvesters, and irrigation equipment.
• Livestock Loans: For the purchase of cattle and poultry, and for improving dairy farms.
• Orchard and Horticulture Loans: For the establishment of fruit orchards and greenhouses.

Interest Rate on Agricultural Loan

The interest rate on agricultural loan in Pakistan varies from one loan type and among the financial institutions offering them. Normally, it tends to fluctuate between 8% and 14% annually. However, for certain specific categories, most especially small farmers' rates, can be brought down significantly or even made free under some government-sponsored programs and subsidies.

The State Bank of Pakistan (SBP) will also be issuing refinancing facilities to banks for providing an effective interest rate for end-users.