KARACHI, Nov 16: Poultry industry, which produces 20 per cent of the total meat production, may get bank loans to improve and modernise the industry, and meet the capital requirement for running and stabilising business.

The State Bank on Friday issued ‘draft guidelines for poultry financing’ to banks and financial institutions (FIs) and other stakeholders for their feedback.

The guidelines will facilitate and encourage banks and financial institutions in enhancing credit flow to the poultry sector. They cover all areas of the poultry industry, including hatchery sector, poultry farming and feed manufacturing.

The SBP has already issued guidelines on livestock and fisheries financing to banks for the diversification of agricultural credit to non-crop sector.

Poultry is an important sub-sector of agriculture. The SBP says that the industry has great potential and can play a significant role in national economy by contributing towards food security of the country, reducing pressure on demand for mutton and beef and earning of foreign exchange.

Its contribution to meat production is 20 per cent and has a share of around 4.8pc in agriculture GDP, and around 1.5 million people are connected with this field.

The draft guidelines cover poultry financing business, including purposes and objectives of the loan, eligibility of borrowers, types of financing, fixation of loan limit and repayment terms, loan monitoring mechanism, etc.

The main objectives of the guidelines are to facilitate banks in developing internal expertise and products for poultry financing and to encourage and facilitate financial sector to provide needed working capital and term finance to poultry sector.

Also, the purpose is to encourage farmers to adopt modern and efficient poultry farming techniques and increase poultry meat and poultry food production for local consumption.

The draft means to promote export of poultry meat and poultry food and its processed products.

The SBP says once final guidelines are issued, banks may develop new products on the basis of (a) target market analysis, its characteristics, size, trends, growth potential, etc; (b) development of financing products; (c) developing procedures for product marketing, delivery and monitoring mechanism, follow-up and recovery; (d) monitoring growth trends and quality of the portfolio and to develop close liaison with the field force to have feedback from the grassroots level; and (e) review developments taking place in the poultry sector within the country as well as in other parts of the world.