Assessing the Contribution of ZTBL Dairy Value Chain Financing to Rural Economic Empowerment in Northwestern PakistanBeenish Ahmed, Khalid Bin Muhammad, Saher Afshan

Abstract

This study investigates the effects of credit provided by Zarai Taraqiati Bank Limited (ZTBL) on livestock outcomes among farmers in the districts of Peshawar, Mardan, Swat, and Dera Ismail Khan in Khyber Pakhtunkhwa (KP), Pakistan. Despite the recognized importance of institutional credit in enhancing rural livelihoods, limited empirical evidence exists on the specific impacts of ZTBL financing on livestock-related indicators in these regions. To address this gap, the study employed a combination of simple random and purposive sampling techniques to collect primary data from livestock farmers through structured interviews. The data were analyzed using a paired sample t-test to evaluate changes before and after credit utilization. The findings reveal that ZTBL credit has had a statistically significant and positive effect on key livestock outcomes, including the number of animals owned, milk productivity per animal, milk used for self-consumption, volume of milk sold, and overall annual income of farmers. These outcomes underscore the transformative potential of agricultural credit in improving both food security and economic well-being in rural KP. Based on these findings, the study recommends that ZTBL introduce interest-free loans based on Islamic partnership models, such as Musharaka and Mudaraba, to increase accessibility for faith-conscious farmers. In addition, it is advised that ZTBL adopt a more flexible collateral policy, simplify credit procedures, and ensure the availability of sufficient credit amounts tailored to the needs of livestock farmers. Expanding branch coverage in rural and underserved areas is also essential to enhance service delivery. This research offers a novel and data-driven perspective on the role of institutional credit in the livestock sector in KP, contributing valuable insights that have been largely overlooked in existing literature.