Karachi, Pakistan – Pakistan’s banking sector is increasingly embracing the government-backed Zarkhez-e (Asaan Digital Zarai Qarza) initiative, a new platform aimed at providing farmers and agribusinesses with easier access to credit, while simultaneously making agricultural lending commercially viable for banks.
The initiative, designed to modernise agri-financing through digital processes, seeks to address the long-standing challenges faced by farmers in accessing formal loans, particularly smallholders and rural producers. Unlike previous programs that struggled due to high risk perception and weak recovery mechanisms, Zarkhez-e offers risk buffers from the government, including a 10% first-loss guarantee and optional crop insurance, giving banks confidence to extend credit to farmers.
A spokesperson for the Pakistan Banks Association (PBA) confirmed that banks are engaging with the initiative voluntarily, attracted by its structured incentives. “The scheme is not mandatory, but it is designed in a way that makes agricultural lending commercially sound for participating banks,” the spokesperson said, adding that final lending decisions remain at the discretion of the banks, based on borrower evaluation and risk assessment.
Digital tools embedded in the initiative further strengthen its viability. Banks can verify potential borrowers using NADRA IDs, mobile SIM checks linked to CNICs, and land data from the Land Information Management System, allowing for quicker, safer loan approvals and better monitoring of credit usage. These safeguards aim to reduce operational risks and improve recovery rates.
Experts say that despite these measures, loan recovery remains a critical challenge in Pakistan’s agriculture sector. However, the combination of government support, digital verification, and risk mitigation mechanisms is seen as a meaningful step toward encouraging banks to view agriculture as a profitable lending sector, potentially transforming rural financial inclusion.
Observers also note that increased access to formal credit could stimulate productivity, reduce reliance on informal lenders, and strengthen the broader agricultural economy. The State Bank of Pakistan continues to support such digital platforms as part of its long-term strategy to integrate technology with rural financing, ultimately aiming to empower farmers and make agri-business more competitive.
As the Zarkhez-e initiative expands across the country, industry watchers will be monitoring whether the program can bridge the gap between rural producers and formal credit, offering a sustainable solution for Pakistan’s agriculture sector while providing banks with profitable lending opportunities.
This story has been reported by PakTribune. All rights reserved.