The State Bank of Pakistan (SBP) set a slightly higher Rs 1,800 billion farm lending goal for 2022–2023 rains.
On Friday, SBP took this decision because of the extensive harm to agriculture caused by enormous floods.
The Rs 1,700 billion target was missed last year primarily as a result of the conservative lending practices of financial institutions.
Devastating flash floods across the nation have put a tremendous amount of pressure on the current year.
However, there are no official statistics yet on the loss of livestock, crops, and other agriculturally linked valuables, a brokerage house first pegged the overall loss at Rs. 900 billion.
In order to meet the demand for agricultural credit, the SBP has set the fiscal year 2019 target for banking institutions of Rs1.8 trillion in annual agriculture loan disbursement.
According to the central bank, under the overall target for FY23, specific targets of Rs140 billion for production loans of the wheat crop, Rs45 billion for tractor financing, and Rs20 billion for harvesters, planters, and other farm machinery have also been set in accordance with the needs for national food security and the mechanization of farms to increase agriculture productivity.
To assist the farming community in obtaining appropriate financing from banks and maximizing the use of their agricultural inputs, the per acre indicative credit ceilings for agriculture financing have also been enhanced.
In response to the wheat shortage, credit for wheat has increased this year by 40% per acre. The cost of importing 2 million tons of wheat is anticipated to be $1.7 billion.
Financial institutions were able to give the agricultural industry Rs 1,419 billion in FY22 as opposed to Rs 1,366 billion in FY21.