This document discusses agriculture credit and small and medium enterprises (SMEs) in Pakistan. It provides classifications and sources of agriculture credit, as well as current credit schemes. It also outlines problems faced by farmers and SMEs, including lack of financing, skilled labor, and marketing challenges. Additionally, it compares agriculture and credit systems between Pakistan and India.

2. Topics:
 Agriculture Credit
 SME in Agriculture

3. Group Members
 M Afzal 10
 Noman Aslam 27
 Saqib Ali 33
 Zohaib Hassan 38
 Zulfiqar Nazir 39

6. What is Credit?
According to Samuelson
“ Credit is the use of someone else’s funds in
exchange for a promise to pay with or without
interest at a later date”
“ Farm Credit or Agriculture Credit is the count of loan or
Credit obtained form any source for the promotion &
development of Agriculture”

7. Agriculture Credit

8. Classification of Agriculture Credit
1. Short Term Credit:
Provided for one year, purpose is for purchasing of
fertilizers, pesticides etc.
2. Medium Term Credit:
Provided for one to five years, Purpose is purchasing of
spry machines or drainage improvements etc.
3. Long Term Credit
provided for a period exceeding five years, purpose for
purchasing tractors, harvesting machines & install of tube
wells/ agriculture land etc.

9. Sources of Agriculture Credit
Non-Institutional or Informal Sources
 Village Money Lenders
 Friends & Relatives
 Landlords
Institutional or Informal Sources
 Zarai Taraqiati Bank Limited ( 1961, only agri credit, low interest)
 Commercial Banks ( More formalities, High interest/ ZTBL)
 Cooperative Societies ( 1904, in 1990 Coop 60562, advance to mem)
 Cooperative Banks ( old form, each province, advance every type)
 Taccavi loans (up to 1960s, crop failure, were at low interest rate)

10. Need of Agriculture Credit
 Agrarian Economy
 Agriculture Backwardness
 Low income of farmers
 Uneconomic Holdings
 Storage & Marketing
 Debt
 Irrigation facility
 Farm productivity
 Interim difficulties
 Modern Technologies
 Unproductive Expenditures
 Agriculture indebtedness in Pakistan
 Natural climates
 Civil & Criminal Suits
 Unorganized Marketing Conditions

11. Problems of Agriculture Credit
 Small Units
 Damage to crops & Land
 Low & Uncertain yields & incomes
 Lack of Credit worthiness & Security
 Small & large cultivators
 Unproductive uses
 High Cost
 Limited flow of Capital to Small Farmers
 Delayed disbursement of Credit

12. Measures to Solve those Problems
 Agriculture Credit Institutions
(ADFC1952)(ABP1957)(ADBP1961) ( ZTBP)
 Federal Bank for Co-operatives (1976)
 Agriculture Credit Advisory Committee (1972)
 Special Schemes (1977 extend credit amount)
 Recovery of Loan
 Finance in kind & supervised
 Pass Book System

13. 65% total population live in rules areas
44.8% people direct involve in agriculture system

14. Current schemas in Pakistan
Asan Qarza Scheme
One Window Operation/
Zarkhaiz Scheme
Sada Bahar Scheme (SBS)

15. Maximum Limit:
Rs.0.500 million per borrower/party.
Loan Disbursement:
The borrower can draw the credit in lump sum or in piece meal according to
his need/requirement.
Rate of Mark up:
12.5 % p.a with 1% rebate for timely repayment.

16. One Window Operation/ Zarkhaiz
Scheme
Maximum Sanction Limit:
Rs.0.2 million per borrower/party
Rate of Mark-up:
12.5 % P.A with 1% rebate on timely repayment
Eligibility Criteria
Farmers having irrigated land up to 25 acres and barani
land up to 50 acres.

17. India v/s Pakistan
 Pakistan
 Punjab 79284 sq
 Production less than Indian
 Tube well 342000
 Tractor 342000
 Large tax on tube well
 Electricity use
 Depends on irrigation system
India
 Punjab 19450 sq
 Large production
 Tube well 860000
 Tractor 860000
 Less tax
 Solar technology
 Irrigation best
system

18. Indian Bank loan to Agriculture
 India
 Up to RS 100,000
 Above Rs 100,000
 Up to 1 laces
 Above to 1 Laces
Interest system
Nil
10% to 15%
Effective Rate 12.75 %
Effective Rate 13.25 %

19. 7 to 12 year’s repayment time or relaxation may be
12 months

20. 400000 million invest on a plant produce fertilizer
But Govt. can't give Gas

21. Better for Pakistan Irrigation system
Better for Agriculture of Pakistan
Exchange the technology

22. Ideas about the Pakistan

23. Define SME’s
 SME as a legally independent company with no more
than 500 employees.

24. •There are approximately 2 million Micro
Small and Medium Enterprises in Pakistan.
These include 400,000 Manufacturing units,
600,000 Service sector units and 1 million
Trade sector units (retailers).

25. Contribution to GDP
 They constitute well above 90% of all enterprises in
the country in terms of
numbers. But because they are by definition small
their share in GDP is not quite as dominant. They are
estimated to be contributing approximately 11% to
GDP.

26. Contribution to Employment
 The SMEs employ roughly 80% of the total non-
agricultural labour force in the country.

27. Manufacturing Sector
 The following information on the SMEs in the
Manufacturing Sector would help in getting a bird’s eye
view of the situation.
 Value
 Employment
 Number

28. PROBLEMS OF SME’s IN
PAKISTAN
% of respondents mentioning
the problem
 Lack of Finance 55%
 Shortage of skilled labour 39%
 Getting business site 38%
 Bribe 21%
 Orders/Marketing of product 28%
 Lack of knowledge 12%
 Government interference 12%
 Getting quality Raw material 10%
 Getting license for work 8%
 Knowledge of new Technology 8%