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State Bank of Pakistan Launches Agriculture Produce Storage Financing Scheme
Source: brecorder.com
Source Date: Saturday, June 05, 2010
Focus: Electronic and Mobile Government, ICT for MDGs, Internet Governance
Country: Pakistan
Created: Jun 07, 2010

The State Bank of Pakistan on Friday launched a new Financing Facility for Storage of Agricultural Produce (FFSAP) to encourage private sector to establish silos, warehouses and cold storages with a view to reducing the post-harvest losses of agriculture produce through enhancing quality of storage capacity of food grains, fruits and vegetables, fish and fish products, etc. The financing under FFSAP scheme shall be available through banks/DFIs at mark-up rates of 8 to 10 percent for a maximum period of 7 years. New imported and locally manufactured plant and machinery, equipments and accessories thereof, to be used in steel/metal/concrete silos, warehouses and cold storages, generators and civil works (up to 65 percent) are eligible for financing.

Under the scheme, which will be valid up to December 31, 2012, banks/DFIs can provide financing up to Rs 500 million for a single project. However, they may provide financing facilities over and above the said maximum limit from their own sources, keeping in view their internal policies. Financing under the scheme shall be subject to compliance with all rules and regulations including Prudential Regulations as prescribed by the State Bank from time to time. It may be pointed out that Pakistan's agriculture sector faces shortage of modern infrastructure and market structure. On the infrastructure side, there is lack of proper warehousing and storage facilities, whereas on the market side, there is lack of grading and testing, collateral management, commodity financing and trading facilities.

In order to introduce modern storage, marketing and post-harvest financing facilities for the agricultural commodities in Pakistan, SBP along with other key stakeholders is working towards an initiative which will ultimately evolve proper storage, fair and transparent price mechanism and post-harvest financing system for agri commodities in Pakistan. As part of this overall initiative, introduction of FFSAP is a first step in this direction. The State Bank of Pakistan on Friday issued a detailed circular to all banks/DFIs containing salient features of FFSAP scheme.
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