Pakistan’s agriculture financing increased during the first half of 2026, but agribusiness lending fell by Rs. 64 billion, according to the State Bank of Pakistan’s Mid Year Performance Review of the Banking Sector.
The mixed trend was recorded during January to June 2026, with private-sector agriculture advances rising while agribusiness loans in the public-sector advances breakdown declined.
Public-sector advances increased by Rs. 87 billion during the period, mainly due to a Rs. 183 billion increase in financing to the energy sector. The State Bank linked the rise to lending associated with circular debt.
This increase was partly offset by a Rs. 64 billion decline in agribusiness lending.
Meanwhile, agriculture advances in the domestic private sector increased to Rs. 723 billion by the end of June 2026 from Rs. 664 billion in December 2025. This represents an increase of Rs. 59 billion in outstanding loans during the first half of the year.
The sugar industry saw a particularly sharp increase in bank financing. The sector received Rs. 205 billion in financing during H1CY26, compared with a Rs. 52 billion reduction in financing during the same period last year.
The State Bank attributed the increase mainly to higher working capital needs. Sugarcane production increased by 6.2 percent to 89 million tons in FY26, while average refined sugar prices fell to Rs. 153 per kilogram from Rs. 166 per kilogram a year earlier.
Pakistan also did not export refined sugar during FY26, compared with exports of 765,734 metric tons in FY25. Lower prices and the lack of exports put additional pressure on the sector’s cash flows.
Credit quality in the agribusiness sector, however, improved. Overall nonperforming loans declined by Rs. 62 billion during H1CY26, while agribusiness nonperforming loans fell by Rs. 54 billion.
The figures show that agriculture financing increased in key areas, particularly private-sector agriculture and sugar-sector working capital, even as agribusiness lending under the public-sector category declined.
