State Bank Of Pakistan Launched Zarkhez-e Scheme – 1 Million Loan for Small Farmers

SBP Zarkhez-e Scheme

State Bank of Pakistan (SBP) has launched a revolutionary Zarkhez-e Scheme initiative aimed at transforming the agricultural sector and improving the financial access for small farmers across the country. The Zarkhez-e Scheme offers collateral-free loans of up to Rs. 1 million to eligible farmers, ensuring that small farmers, especially those in underserved areas, can access much-needed financial support without the burden of physical collateral.

This initiative is a step toward supporting subsistence farmers and boosting agricultural productivity. With the backing of the Prime Minister’s vision to strengthen the agriculture sector, this scheme is designed to foster financial inclusion and create a more resilient agricultural community in Pakistan.

What is the Zarkhez-e Scheme?

Zarkhez-e Scheme is an online, technology-driven platform developed by the State Bank of Pakistan in collaboration with commercial banks and microfinance institutions (MFBs). The scheme enables farmers to apply for collateral-free agricultural loans without the need for physical guarantees.

Through this digital platform, farmers can easily apply for loans, track their status, and receive financial assistance directly through registered agri-merchants. By removing traditional barriers like physical collateral and middlemen, the scheme is designed to make agricultural financing more accessible, transparent, and efficient.

Key Features and Benefits of the Zarkhez-e Scheme

1. Loan Amount and Financing Structure

The Zarkhez-e Scheme offers farmers up to Rs. 1 million in loans. The loan is split into:

• 75% in-kind financing: This portion is provided as agricultural inputs, such as quality seeds, fertilizers, pesticides, and diesel.
• 25% cash support: This amount is given in cash, which helps cover operational expenses like irrigation, transportation, and labor costs.

This split ensures that the loans are effectively utilized for improving farm productivity, while also providing the flexibility to cover other operational costs.

2. Digital and Easy Loan Application Process

Zarkhez-e Scheme makes it incredibly easy for farmers to apply for loans through an online portal. The process is designed to reduce the bureaucracy, paperwork, and time-consuming procedures traditionally involved in loan applications.

• Online Application: Farmers can visit the Zarkhez-e portal, fill out their details, and submit their CNIC number to apply for loans.
• Land Verification: The Land Information Management System (LIMS) is used to verify the landholding details, ensuring that farmers are applying for loans on valid agricultural land.
• Application Approval: Once verified, the application is sent to a commercial bank or microfinance bank (MFB) for processing and approval.

This online system ensures that farmers don’t need to visit bank branches, making the application process more convenient.

3. Risk Coverage and Subsidies

To encourage participation and protect both farmers and lenders, the State Bank of Pakistan has introduced several risk coverage and subsidy benefits under this scheme:

• 10% First-Loss Coverage: This feature helps to mitigate financial risks for lending institutions.
• Operational Cost Subsidy: Each borrower receives a subsidy of Rs. 10,000 for operational costs.
• Insurance Coverage: All borrowers are automatically enrolled in life insurance equal to their loan amount. Furthermore, Crop Loan Insurance covers the five major crops to protect farmers against potential natural disasters.

4. Agri-Advisory and Technical Support

Another key benefit of the Zarkhez-e Scheme is the agri-advisory services available to farmers. These services provide expert guidance on:

• Crop management
• Soil health
• Pest control

This technical support ensures that farmers can optimize their farming practices and improve crop yields, ultimately contributing to sustainable farming and reduced production costs.

Eligibility Criteria and Loan Limits

The Zarkhez-e Scheme has specific eligibility criteria to ensure that the benefits reach genuine small farmers:

• Punjab & KPK: Landholding up to 12.5 acres.
• Sindh: Landholding up to 16 acres.
• Balochistan: Landholding up to 32 acres.

Loan amounts are capped depending on the type of landholder:

• Rs. 100,000 per acre of land.
• Up to Rs. 1 million for landowners.
• Up to Rs. 500,000 for tenant farmers.

These criteria ensure that both landowners and tenant farmers have an equal opportunity to access collateral-free financing.

Zarkhez-e Scheme Digital Application and Verification Process

Step 1: Submit Your Application

Farmers can submit their applications through the Zarkhez-e portal by providing their CNIC number and personal information.

Step 2: Land Verification

Once the application is submitted, the Land Information Management System (LIMS) verifies the applicant’s land ownership and eligibility. This digital process ensures transparency and accuracy in the verification process.

Step 3: Loan Processing

After the verification is complete, the application is forwarded to the selected commercial bank or microfinance bank (MFB) for processing. Upon approval, the loan amount is disbursed to the agri-merchants or cash as needed.

Impact of Zarkhez-e Scheme on Pakistan’s Agriculture

The Zarkhez-e Scheme aims to revolutionize the agricultural financing system by bringing digital access to rural farmers, enhancing productivity, and promoting financial inclusion. By offering collateral-free loans and support services, the scheme empowers farmers to overcome financial barriers and grow their crops more efficiently.

Additionally, the scheme aligns with Pakistan’s broader goal of ensuring food security, economic growth, and rural development. It provides farmers with the tools and financial resources they need to thrive, helping to build a sustainable and resilient farming community.

Frequently Asked Questions (FAQs)

• Q: Who can apply for the Zarkhez-e Scheme?
  • A: Small farmers with landholding limits as defined for Punjab, KPK, Sindh, and Balochistan are eligible for the scheme. Landowners and tenant farmers can apply.
• Q: How much can a farmer borrow under this scheme?
  • A: Farmers can borrow up to Rs. 1 million depending on their landholding, with 75% provided in-kind and 25% in cash.
• Q: How can I apply for the loan?
  • A: Farmers can submit their applications through the Zarkhez-e portal using their CNIC number for eligibility verification.
• Q: What is the risk coverage available?
  • A: The scheme offers 10% first-loss coverage, along with life and crop insurance to protect farmers and lenders from risks.

Conclusion

Zarkhez-e Scheme is a landmark initiative aimed at empowering small farmers in Pakistan. By providing collateral-free loans, agri-advisory support, and digital access, it enables farmers to improve their productivity, sustain their livelihoods, and contribute to Pakistan’s economic growth. This initiative aligns with the government’s vision for a digitally transformed agricultural economy, fostering financial inclusion and sustainable farming practices across the country.