Federal govt approves Rs 6.861 billion mark-up subsidy on agriculture loans

ISLAMABAD, Pakistan: Prime Minister Imran Khan announced a fiscal package of over Rs 1,200 billion in the wake of COVID-19 pandemic while the Economic Coordination Committee (ECC) of Cabinet Division approved the proposals on May 13, 2020.

Out of this Package, an amount of Rs 6.861 billion has been approved for the provision of financial relief in terms of markup subsidy on bank’s loans to the most deserving sub-segment of farming community i.e. farmers with landholding up to 12.5 acres throughout the Country.

Over 70 percent of the growers in Pakistan own land up to 12.5 acres.

A mark-up subsidy at 10 percent on the loans extended or to be extended during the fiscal year 2020-21 to the farmers of 12.5 acres of land has been approved by the government of Pakistan.

The total amount of subsidy is Rs 6.86 billion.

All the loans with passbook as collateral are eligible to avail the subsidy.agriculture loans - Prime Minister Imran Khan announced a fiscal package of over Rs 1,200 billion in the wake of COVID-19 pandemic while the Economic Coordination Committee (ECC) of Cabinet Division approved the proposals on May 13, 2020.  Out of this Package, an amount of Rs 6.861 billion has been approved for the provision of financial relief in terms of markup subsidy on bank’s loans to the most deserving sub segment of farming community i.e. farmers with land holding up to 12.5 acres throughout the Country.  Over 70 percent of the growers in Pakistan own land up to 12.5 acres.  A Mark-up subsidy at 10 percent on the loans extended or to be extended during the fiscal year 2020-21 to the farmers of 12.5 acres of land has been approved by the government of Pakistan.  The total amount of subsidy is Rs 6.86 billion. All the loans with passbook as collateral are eligible to avail the subsidy.  The salient features of the mark-up subsidy are: i.	The government shall bear markup at 10 percent on agricultural loan disbursed/to be disbursed to above mentioned sub segment of farming community during fiscal year 2020-21 and balance markup shall be payable by the individual farmers on the loan amount availed from the Zarai Taraqiati Bank Limited (ZTBL). ii.	The ZTBL under a mutually agreed/predefined mechanism with the Ministry of National Food Security shall pass on the involved subsidy to all the borrowers with 12.5 acres of land holding.  iii.	The farmers with land holding of up to 12.5 acres all over the Country shall be eligible for subsidy.  iv.	The borrowers/farmers offering only collateral of agricultural land under Pass-Book shall be entertained for subsidy.  v.	Farmers availing agricultural finance facility under any other collateral; i.e residential /commercial property, gold, defense certificate and cash, shall not be qualified for any relief under the package.

The salient features of the mark-up subsidy are:

  • The government shall bear markup at 10 percent on agricultural loan disbursed/to be disbursed to above-mentioned sub-segment of the farming community during the fiscal year 2020-21 and balance markup shall be payable by the individual farmers on the loan amount availed from the Zarai Taraqiati Bank Limited (ZTBL).
  • The ZTBL under a mutually agreed/predefined mechanism with the Ministry of National Food Security shall pass on the involved subsidy to all the borrowers with 12.5 acres of landholding.
  • The farmers with landholding of up to 12.5 acres all over the Country shall be eligible for the subsidy.
  • The borrowers/farmers offering only collateral of agricultural land under Pass-Book shall be entertained for subsidy.
  • Farmers availing agricultural finance facility under any other collateral; i.e residential /commercial property, gold, defense certificate, and cash, shall not be qualified for any relief under the package.