Small farmers, despite representing a major chunk of overall farming households, have very little access to formal credit. The credit which is available to these small farmers, mainly from informal sources, is of very high cost, which escalates their cost of production. As a result, these small farmers have to bear the financial burden which traps them in perpetual cycle of poverty due to low margins and limited income.
The Government of Punjab (GoPb) has taken an initiative to promote the wellbeing of these small farmers through provision of interest free and easy access to financing in Punjab. The objective of the Interest Free Agri. E-Credit Scheme is to reduce the cost of production for these marginalized farmers and to increase the outreach of formal and digital financial services to meet the agenda of financial inclusion. NRSP has been selected as one of Participating Financial Institutions (PFIs) to implement the scheme with small holding farmers having landholding up to 2.5 acres of land and tenants / sharecroppers of up to 5 acres in selected districts of Punjab.
The borrower will be entitled not more than PKR 25,000 per acre for Rabi crops and not more than PKR 40,000 per acre for Kharif crop. The actual loan size for each borrower will be determined based on his ability to produce, seriousness and repayment capacity.