SBP Unveils Collateral-Free “Zarkhez-e” Agri Loans

KARACHI: The State Bank of Pakistan (SBP) has launched a groundbreaking collateral-free digital agriculture financing program called “Zarkhez-e”, designed to empower small and marginalized farmers, particularly in unserved and underserved areas.

Announced via a circular from the Agricultural Credit and Microfinance Department, the initiative operationalizes the National Subsistence Farmers Support Initiative (NSFSI), aligning with the Prime Minister’s vision to revolutionize Pakistan’s agriculture sector. Branded with the slogan “Asaan Digital Zarai Qarza”, it pioneers digital agricultural lending and rural development.

The program allocates 75% of financing as in-kind disbursements, ensuring farmers access vital inputs like quality seeds, fertilizers, pesticides, and diesel through registered Agri-merchants. The remaining 25% can be provided in cash for supplementary farming costs. Farmers will also gain Agri-advisory services to enhance productivity and adopt sustainable cultivation practices.

Eligibility caps landholdings at 12.5 acres for Punjab and Khyber Pakhtunkhwa, 16 acres for Sindh, and 32 acres for Balochistan. Financing extends up to Rs100,000 per acre, with maximums of Rs1 million for landowners and Rs500,000 for tenants.

For efficiency and transparency, the SBP has developed a standardized process and digital portal in partnership with banks and microfinance institutions. Farmers can apply online without branch visits. Post verification and agronomic assessment via the Land Information Management System (LIMS), applications route to the selected bank for approval.

The facility offers 10% first-loss coverage, plus an operational subsidy of Rs10,000 per borrower for net increases in borrowers. Most banks and microfinance institutions have integrated with the centralized portal and LIMS, onboarding Agri-merchants. The SBP has pressed remaining entities to expedite integration.

A standout element of “Zarkhez-e” is mandatory life and crop insurance. Farmers receive life insurance matching the loan amount, while Crop Loan Insurance under the Crop Loan Insurance Scheme (CLIS) covers five major crops.

Through this initiative, the SBP seeks to elevate agricultural productivity, advance financial inclusion, and drive sustainable rural development by embedding technology in Pakistan’s farming finance ecosystem.