Published in Dawn on Monday, 05 Jan:
By Zafar Masud
Chairman – PBA
This refers to the article “The flaws of coercive sustainability” (Dawn, January 5, 2026). While the Pakistan Banks Association (PBA) welcomes constructive debate on financial policy, we feel it is important to clarify the structural realities of the Zarkhez-e (Asaan Digital Zarai Qarza) scheme to ensure a fair public record.
We believe the skepticism expressed regarding the scheme’s viability is misplaced. A key distinction of Zarkhez-e is that eligibility does not equate to entitlement. The decision of who to lend to, and who not to, rests squarely with the banks. Furthermore, contrary to the impression of rigid mandates, banks remain free to obtain security and collateral in line with their internal risk policies.
We also wish to address the narrative of “coercion” or “directed lending.” The banking industry’s participation in this scheme is not a result of pressure from the State Bank of Pakistan or the Ministry of Finance. Rather, banks are engaging with this initiative because it is structured as a commercially viable incentive scheme.
We acknowledge the valid concerns raised regarding the general need to strengthen recovery laws in Pakistan. A weak recovery framework is indeed a challenge for the sector. However, the Zarkhez-e scheme has been specifically designed to mitigate these legal risks through robust government-backed incentives. The scheme offers a 10% first-loss guarantee which provides a tangible buffer against default that is usually absent in open market lending. Additionally, the framework facilitates crop loan insurance as a tool to de-risk the portfolio, though it is important to note that this is not mandatory.
Combined with real-time NADRA ID verification, PMD mobile SIM verification against CNIC, and the Land Information Management System (LIMS) for digital agronomic data, these cogent incentives make participation a logical business decision. The banks are partners in this initiative because it aligns with our commercial interests to safely expand into the agricultural sector.