Pakistan’s banking sector exceeds agricultural loan target, disburses Rs2.58 trillion in FY25

Pakistan’s banking sector disbursed a total of Rs2.58 trillion in agricultural loans during the fiscal year 2024-25, surpassing its annual target of Rs2.57 trillion. This represents a year-on-year growth of 16.3%, up from Rs2.22 trillion in FY24.

According to the State Bank of Pakistan (SBP), the disbursed amount achieved 100.2% of the target. The growth reflects the success of SBP’s Agriculture Credit Expansion Plans (A-CEPs) aimed at improving credit access for farmers and enhancing financial inclusion in rural areas. Currently, 47 financial institutions, including large commercial banks, microfinance banks, and rural support programs, are providing agricultural loans.

As of June 2025, the outstanding portfolio of agricultural loans reached Rs995.3 billion, marking a 13.8% increase from Rs875 billion the previous year. The number of active borrowers grew by 7.3%, reaching 2.9 million.

Regional and institutional breakdown
Punjab led agricultural credit distribution with Rs2,045.1 billion, 103.6% of its A-CEP+ target. Sindh followed with Rs453.4 billion (93.1% of target), and Khyber Pakhtunkhwa received Rs55.2 billion (68.9% of target). Other regions, including Balochistan, Azad Jammu and Kashmir, and Gilgit-Baltistan, received a combined Rs23.6 billion.

Five major commercial banks provided Rs1,442.3 billion, meeting 108% of their target. Specialized banks like Zarai Taraqiati Bank Ltd and Punjab Provincial Cooperative Bank Ltd disbursed Rs85.6 billion, achieving 81% and 119% of their targets, respectively. Microfinance banks and institutions also contributed, disbursing Rs252.3 billion and Rs30 billion, respectively.

Sector-specific financing
The farm and crop sector received Rs1,443.8 billion, representing 56% of total disbursements, a 19.3% increase from the previous year. The non-farm sector, including livestock, poultry, and agri-services, received Rs1,113.4 billion, or 44% of total disbursements, reflecting a 12.8% year-on-year increase.

SBP’s targeted schemes and future plans
SBP, in collaboration with federal and provincial governments, launched several initiatives to further support agricultural financing. The Risk Coverage Scheme for Small Farmers and Underserved Areas offers up to 10% first-loss coverage to banks, aiming to generate Rs100 billion in new loans annually and bring 250,000 new farmers into the formal credit system each year.

The National Subsistence Farmers Support Initiative provides digital, collateral-free financing to smallholders, while the Prime Minister’s Youth Business and Agriculture Loan Scheme (PMYB&ALS) achieved 100% of its target in its first two phases, disbursing Rs32 billion through 20 partner institutions by June 2025. The FY26 allocation for PMYB&ALS has been raised to Rs65 billion.

Additionally, the Electronic Warehouse Receipt Financing (EWRF) system, which allows farmers to secure loans against stored commodities in accredited warehouses, disbursed Rs1.996 billion in FY25, bringing total financing through the scheme to over Rs10 billion since its launch in 2022.

These efforts continue to enhance access to agricultural finance, promote rural development, and foster economic growth in Pakistan’s agricultural sector.