LOCAL MANUFACTURING MACHINERY
The bank provides this facility to the business man who wants to buy the local manufactured machinery. LMM funds are provided by the SBP. Rate of markup for this type of loan facility is 12% on this type of loan.
PAYMENT AGAINST DOCUMENT
Bank make the payment to party against document and upon expire date. Bank receives back money with mark up in this type of lending.
Upon receipt of the documents negotiated by the sellers bank. The opening bank makes sure that documents are according to terms and conditions of the credit.
Agriculture Credit
Banks Agriculture division deals with the agriculture advances. Bank provides the Agriculture Advances in order to enhance and support the agriculture sector of the country. Agriculture advances are of the two types. The types are as follows:
- Farm Credit
- Non Farm Credit
FARM CREDIT
These are the credits provided by the MCB for the purchases of inputs for development of agriculture sector. Following are two main sub classes of Farm Credit.
- Production Finance
- Development Finance
PRODUCTION FINANCE
These are short term loans. These loans are provided to farmers for purchases of different type of input, for example, Seeds, Fertilizers, Pesticides. These loans are provided against personal guarantees or mortgage of land as a security. Rate of profit for these loans is 10%.
DEVELOPMENT FINANCE
These are medium or long term loans. These loans are provided for the development of agriculture sector. Main purpose of these loans are to purchase instrument:
- Tractors
- Implements(Trolley, Thresher etc.)
- Installation of tube-well
- Planting of garden
The loans are disbursed against security of land (mortgage) or any other security acceptable to bank. The rate of profit for these loans is 11% to 17%.
NON FARM CREDIT
Second major form of agriculture advance is Non-Farm Credit. These loans are provided against mortgage of land as a security or pledge of equipment as a Collateral security. These are medium or long term investment depending up the project. These loans are provided to boost up agriculture sector to provide the sources of earning of foreign exchange as well as to provide employment to people. Following are the different types of small industries for which loans are provided to improve the economy of the country:
- Fish Farm
- Cattle Farm
- Poultry Farm
- Dairy Farm
