What Is the Zarkhez-E Loan Scheme for Farmers?
The federal government has launched a new agricultural credit initiative called “Zarkhez-E” to support Pakistan’s small farmers. According to the Ministry of Finance, this is a collateral-free, digitally powered agri-loan scheme designed specifically for smallholders who have long been excluded from formal credit channels.
The programme is aimed at the 93 percent of farmers who operate on a small scale and often rely on informal lenders, middlemen or local moneylenders charging very high interest. Through Zarkhez-E, the government wants to bring these farmers into the formal financial system and give them a fair chance to access bank finance on transparent and predictable terms.
Why Small Farmers Needed a New Credit Model
Pakistan’s agricultural credit framework has historically favoured scale over equity.
The Ministry of Finance notes that only about 7 percent of farmers receive nearly 68 percent of total farm loans, mostly large landowners and agribusinesses with strong collateral and banking relationships.
As a result, millions of small farmers have remained unbanked and under-financed, even though they play a central role in food production and rural employment. Without access to affordable credit, they struggle to buy quality seed, fertiliser, machinery and other inputs on time.
Many are forced to borrow from informal sources or sell their crops in advance at low prices, which traps them in a cycle of low productivity and poverty. Zarkhez-E has been designed to rebalance this system by shifting the focus from land ownership and collateral to farmer potential, productivity and inclusion.
Collateral-Free, Digital and Data-Driven Lending
A key feature of the Zarkhez-E scheme is the removal of collateral requirements. Instead of demanding land deeds or property documents, the programme uses a digital and data-driven approach to assess lending risk and farmer performance.
Traditional paperwork and manual verification are being replaced with tools such as satellite imagery, digital agronomy platforms and verified digital identity systems. These technologies can help banks and partner institutions understand crop patterns, land use, weather risks and expected yields in a more accurate way.
By combining this information with basic farmer data, lenders can make informed decisions without insisting on conventional collateral. This approach is intended to open doors for smallholders who rent land or farm on the basis of informal agreements and therefore cannot meet standard collateral conditions.
Loan Limits, Regional Equity and Target Beneficiaries
Under Zarkhez-E, the government expects to bring around 750,000 previously unbanked farmers into the formal financial network over the next three years. During this period, roughly Rs300 billion in credit is projected to flow into the rural economy through the scheme.
Loan ceilings have been set at up to Rs500,000 for tenant farmers and up to Rs1 million for farmers who own land. This structure recognizes the different financing needs of tenants and owner-cultivators, while still keeping ticket sizes within a manageable range for banks.
The programme has also been designed on regionally equitable lines. Farmers in Khyber Pakhtunkhwa, Balochistan, Gilgit-Baltistan, Azad Jammu and Kashmir and underserved areas of Sindh and Punjab are all expected to benefit on similar terms.
This is meant to avoid a situation where only a few districts or provinces capture most of the new financing.
How Farmers Can Access Zarkhez-E Loans
To make onboarding easier, the government has linked the scheme with a dedicated digital platform. The Zarkhez app is now available for download on the Google Play Store, allowing eligible farmers to begin the process from their mobile phones. Through the app, farmers can submit basic information, receive guidance and connect to participating banks and financial institutions. Those who do not have smartphones or are not comfortable with digital tools can still visit nearby bank branches for assistance with registration and documentation.
For farmers, the key is to use these loans wisely—investing in high-quality inputs, better farming practices and small-scale mechanisation that can raise productivity and income.
If implemented effectively, Zarkhez-E has the potential to change how rural credit works in Pakistan by giving small farmers a stronger, fairer footing in the financial system.
