ISLAMABAD, Feb 11: The State Bank of Pakistan has directed 21 banks to increase the credit facility for agricultural loans by adding another 150 items to the already existing list of agriculture credit schemes.

Addressing a press conference here on Wednesday, the director of the Agri Credit Department (ACD) of SBP, Syed Ishtiaq Ali, said the small rural farmers would benefit from the enhanced scope, simple eligibility criterion and coverage of the revamped scheme launched by the SBP, with the active participation of commercial banks.

Giving background details for relaunching the scheme, Mr Ishtiaq said the objective of benefiting the rural community could not be achieved over the years since the scheme was originally launched in 1973 with the participation of five banks including Habib Bank, Allied Bank, Muslim Commercial Bank, National Bank of Pakistan and Agricultural Development Bank.

He said the scheme has been revamped by incorporating the suggestions of the review committee formed by the governor SBP, Dr Ishrat Hussain. He said the volume of credit and accessibility would increase as the conditionality of territorial jurisdiction for application of loans has been done away with.

A farmer could now apply for a loan in any branch of the 21 participating banks and a complete value chain of credit facility would now be available for multiple sectors including transportation, storage, packing, poultry, fisheries, livestock and fruits and vegetables besides the existing list of items eligible for agricultural loans.

The complicated documentation process has been simplified and only six documents are required to be completed, he said, adding, the presidents of banks have been directed to order the appropriate delegation of authority to the branch level.

He said the agricultural credit facility of the five big banks registered a 223 per cent increase in the financial year 2002-2003 compared to 1998-1999. He said the federal minister for food and agriculture, Sardar Yar Mohammad Rind, would inaugurate the two-day banking training course for disbursement of agricultural loans on Thursday at Islamabad.

The SBP has launched a series of training programmes in order to implement the decision of the Agricultural Credit Advisory Committee (ACAC) to create awareness among the farming communities and diagnose the handicaps being faced by the banks to follow SBP policies and programme for enlarging the scope and volume of Agricultural credit.

Replying to a question about the availability of credit facility to the poor rural community who cannot furnish appropriate collateral against the loan, Mr Ishtiaq said on a personal guarantee of two responsible persons a loan of Rs100,000 could be advanced to such cases.

However, he said there is no upper limit for credit against the appropriate collateral. The rural community would also benefit from the Revolving Credit Scheme as the process for payback and interest calculation has been made client friendly, he said.