Regulatory Alerts2025-08-20 | ACFID Circular No. 02 of 2025 of 2025Added · Updated
Risk Coverage Scheme for Small Farmers and Underserved Areas
The Government of Pakistan introduces a risk coverage scheme providing 10% first loss coverage on outstanding agricultural loan portfolios for new borrowers and incremental portfolios for existing borrowers. This scheme applies to all commercial, Islamic, specialized, and microfinance banks for fresh production loans up to Rs3.0 million, extended to small and marginalized farmers and those in unserved/underserved areas from July 1, 2025, to June 30, 2028. Risk coverage is triggered when a loan or installment is overdue by 12 months. Additionally, the Federal Government will pay banks Rs10,000 per new borrower for the net increase in borrower numbers over the previous year.