Govt approves Rs6.861 billion markup subsidy on agri-loans

ISLAMABAD: The government has approved Rs6.861 billion for the provision of financial relief in terms of markup subsidy on bank loans to the farming community.

The prime minister has announced a fiscal package of over Rs1,200 billion in the wake of COVID-19 pandemic which was approved by the Economic Coordination Committee (ECC) of the federal cabinet on 13th May, 2020.

The subsidy on agri-loans will be given to farmers with landholding up to 12.5 acres, throughout the country. Over 70 percent of the growers own small landholding up to 12.5 acres.

A mark-up subsidy of ten percent on the loans extended during the fiscal year 2020-21 to the farmers of 12.5 acres land has been approved by the government worth Rs.6.86 billion.

All the loans with passbook as collateral are eligible to avail the subsidy. The government will bear 10 percent markup on agricultural loan disbursed to sub-segment of the farming community during the fiscal year 2020-21 and remaining shall be payable by farmers on loans availed from Zarai Taraqiati Bank (ZTBL)

ZTBL under a mutually agreed mechanism with Ministry of National Food Security shall pass on the subsidy to all the borrowers. The farmers with landholding of up to 12.5 acres, all over the country shall be eligible for the subsidy.

The farmers offering only collateral of agricultural land under passbook shall be entertained for the subsidy, while other collaterals such as residential or commercial property, gold, defence certificate, and cash are not qualified for any relief under the package.