SBP’s ‘Zarkhez-e’ Initiative to Empower Small Farmers and Digitize Agriculture Financing

The State Bank of Pakistan (SBP) has introduced ‘Zarkhez-e’, a digital, collateral-free financing program aimed at providing small and marginalized farmers with easier access to agricultural credit.

SBP Zarkhez-e Initiative is part of the National Subsistence Farmers Support Initiative (NSFSI) under the Risk Coverage Scheme for Small Farmers and Underserved Areas. With the tagline “Asaan Digital Zarai Qarza”, the program marks a new chapter in digital agricultural lending and rural development.

Notified through ACFID Circular No. 2 of 2025, the scheme allows farmers to apply for loans fully online via a centralized portal, removing the need for branch visits. Applications are verified and assessed using the Land Information Management System (LIMS) before being forwarded to the selected bank or microfinance institution for processing.

Loan Structure and Support

Under ‘Zarkhez-e’, small farmers can access loans of up to Rs 1 million, while tenant farmers may receive up to Rs 500,000, depending on landholding size. Around 75 percent of the financing is provided in-kind, covering quality seeds, fertilizers, pesticides, and diesel through approved agri-merchants. The remaining 25 percent is disbursed in cash for other farming expenses.

In addition to financial support, farmers benefit from agri-advisory services, guiding them on modern farming methods, crop management, and sustainable practices to improve yields and productivity.

How to Apply for SBP Zarkhez-e Loan

Applying for Zarkhez-e is designed to be simple and fully digital:

1. Register on the Portal or App: Create an account via the Zarkhez-e portal or mobile app.

2. Fill Out the Application: Provide personal and landholding details and select a preferred bank or microfinance institution.

3. Verification & Agronomic Assessment: Applications are checked through LIMS and assessed for agricultural suitability.

4. Loan Approval & Disbursement: Approved loans are partially disbursed in-kind and partially in cash.

5. Access Advisory Services: Farmers can consult agri-advisory experts for guidance on crop productivity and sustainable practices.

This digital approach ensures transparency, speed, and wide accessibility, particularly for farmers in remote areas.

SBP Zarkhez-e Initiative vs Traditional Agricultural Loans

Digital Integration and Efficiency

The SBP has worked closely with banks and microfinance institutions to create a standardized process flow ensuring smooth implementation. Most institutions have integrated their systems with the centralized portal and LIMS, while others are encouraged to complete the onboarding process quickly.

The digital system ensures transparency, accountability, and uniform access, allowing farmers to manage applications without visiting a branch.

Risk Coverage and Lender Support

Loans under Zarkhez-e include 10 percent first-loss coverage, reducing risk for lenders. Banks and microfinance institutions also receive an operational cost subsidy of Rs 10,000 per borrower for net increases in outstanding loans. These measures encourage institutions to extend credit to more farmers while managing risk effectively.

Impact on Rural Communities and Agriculture

Agriculture contributes around 20 percent of Pakistan’s GDP and employs about 40 percent of the workforce, yet many small farmers struggle to access formal credit.

By combining digital loans, in-kind support, advisory services, insurance coverage, and risk mitigation, Zarkhez-e aims to boost productivity, strengthen rural livelihoods, and integrate more farmers into the formal financial system.

Experts note that, if effectively implemented, the program could enhance food security, stabilize rural incomes, and promote broader economic growth. By reducing dependency on informal loans and providing life and crop insurance, the initiative could serve as a model for sustainable agricultural financing in developing economies.

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