SBP approves HBL Zarai as agricultural services provider under digital farm loan scheme

Islamabad: The State Bank of Pakistan (SBP) has approved HBL Zarai Services Limited as an Agricultural Services Provider (ASP) under the ‘Zarkhez-e’, Asaan Digital Zarai Qarza Scheme, enabling banks to expand structured in-kind financing for farmers, officials said on Monday.

The approval, conveyed through the Pakistan Banks Association, allows participating banks to provide agricultural credit in the form of services rather than cash. The model is intended to improve transparency, ensure productive use of financing, and strengthen farm-level monitoring by linking credit directly to inputs and services.

Under the scheme, in-kind financing replaces cash disbursement with access to approved agricultural services, including quality inputs, agronomic advisory, mechanisation and market linkages. Regulators say the approach reduces leakages and helps ensure funds are used for productive farm activities.

Commenting on the development, SBP Deputy Governor Saleem Ullah said the scheme aims to deploy agricultural financing more transparently while improving farmer productivity through advisory and service delivery. He noted that approved service providers play a key role in strengthening oversight and outcomes for farmers.

As an approved ASP, HBL Zarai will offer an end-to-end agriculture services platform, allowing farmers to utilise financing limits at its locations for seeds, fertilisers and crop protection products, supported by on-ground agronomic advice. The company will also provide mechanisation on a pay-per-use basis and a structured crop off-take mechanism offering market access, quality grading and documented payments.

Pakistan Banks Association Chairman Zafar Masud said the onboarding of integrated service providers enables banks to work with execution partners to promote responsible agricultural financing and service-based delivery.

HBL Zarai Chief Executive Officer Amer Aziz said the approval reflects confidence in the company’s integrated service model, aimed at translating agricultural finance into higher productivity and improved farmer incomes.

Officials said several banks have already begun engaging with HBL Zarai to operationalise in-kind financing under the scheme, focusing on system integration and transaction processes. The move is expected to support broader goals of sustainable agriculture, financial inclusion and farmer-centric development.