The
Presidents / Chief Executive Officers
Commercial/Specialized Banks
Dear
Sirs / Madam,
Guidelines
for Livestock Financing
Livestock
is the largest sub-sector of the agriculture accounting
for 47 percent of value addition in the sector and constitutes
about 11 percent of the GDP. The disbursements to the agriculture
sector have witnessed significant growth during the last
few years as a result of sector friendly policies of State
Bank of Pakistan and efforts of the commercial banks. However,
the livestock sub-sector could not get the due share in
the substantially enhanced flow of credit to the Agriculture
sector.
In view of the contribution of the livestock sector to GDP
& employment creation specially in rural areas, SBP
established a Committee of Experts in August, 2005 to devise
a strategy for increasing the share of institutional finance
to this sector with huge growth potential. In light of the
recommendations of the Expert Committee and input from the
stakeholders including banking sector and MINFAL, SBP has
framed ‘Guidelines for Livestock Financing’
to facilitate and encourage Banks/FIs in enhancing credit
flow to the livestock sector. The guidelines cover all areas
of the livestock financing business including loan purpose
and objectives, product development, eligibility of borrowers,
delivery channels, monitoring mechanism etc. With the issuance
of these guidelines, Banks/FIs are expected to considerably
enhance the credit flow to this important sector of the
economy. Banks may adopt the guidelines in its present form
or with some modifications that suit their organizational
needs and market characteristics.
Please acknowledge receipt.