Circulars/Notifications - Agricultural Credit Department  
 ACD Circular No. 01 of 2006
August 28, 2006  

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.


Enclosed as above


Yours faithfully,

(Muhammad Ashraf Khan)
Director

       
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