Credit Guarantee Scheme for Small and Marginalized Farmers by SBP hailed, Amount of Agricultural Guarantee should be Increased to Rs.500,000 and Risk Coverage to 75%.

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January 11, 2016

President PBIF and All Karachi Industrial Alliance, Former Provincial Minister of Information Technology and First Vice Chairman of the Businessmen Panel of FPCCI Mian Zahid Hussain told that existing efforts by the Govt. to spur growth in agricultural sector, to achieve 1st Millennium Development Goal, are not sufficient. He told that although, the scheme of Credit Guarantee for Small and Marginalized Farmers (CGSMF) announced by State Bank of Pakistan (SBP) is good step in right direction which was need of time but, the relief provided is insufficient that could fail the whole scheme.

Mian Zahid Hussain told that our small farmer is  living life of extreme destitution and clamped by informal lenders since centuries, although SBP is motivating DFIs to promote Agricultural Credit but result produced depicts otherwise. He told that in a long period of 9 years, from 9.03% in June-06 to 10.13% in Oct-15, there is a meager increase of mere 1.1% in lending of credit to agricultural sector.

The Former Minister told that risk coverage of 50% by recent Credit Guarantee Scheme against financing exposure needs to be increased to 75% and limit of the loan amount to Rs.500,000 from existing amount of Rs.100,000, he added. He hoped that suggested measures in CGSMF Scheme will promote phenomenal growth in agricultural sector and informal lenders will be sidelined.

PBIF Chief while expressing his concern told that last year Pakistan had bumper crop of Cotton, which not only sufficed need of our textile sector but also earned foreign exchange for the country but  ignorance by relevant authorities and not taking timely measures have propelled the cotton production to 637 kilogram per hectare from record production of 812 kilogram per hectare.  It had not only pushed agricultural sector in crisis but also pushed the whole economy in a crisis, he added. He told that this year Pakistan will have to rely on imported cotton to satiate export orders and this cash commodity have been converted into burden on Balance of Payment instead of earning for the country.

Former Provincial Minister told that in addition, use of modern techniques, basic infrastructure and agriculture research facilities are needed to accelerate growth of agriculture sector may contribute toward growth of agrarian economy of Pakistan.

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