Banks disbursed Tk18,326 crore in farm loans from July to December of FY24, accounting for 52.36% of the fiscal’s total disbursement target.
The disbursement target of agricultural credit in FY24 is Tk35,000 crore, 13.6% higher than the previous financial year’s target of Tk30,811 crore.
In the July-December of FY24, the total recovery of agricultural credit reached Tk17,779 crore, which was higher than Tk16,429.76 crore in the previous financial year.
The outstanding balance, including interest, stood at Tk55,395 crore, an 8.6% increase from the previous financial year.
State-owned commercial banks and specialized banks aimed to disburse Tk12,030 crore, while private banks and foreign commercial banks targeted Tk22,970 crore in FY24.
These disbursement targets were 34.37% and 65.63% of the total agricultural credit disbursement target for FY24 respectively.
Crop sub-sector received 44% of the disbursed credit, followed by livestock and poultry 24%, fisheries 14%, poverty alleviation 7% and other sectors 8%.
As much as 40.6% of the country’s workforce is directly employed in the agriculture sector, according to banking sources.
The farm loans enable farmers to invest in inputs like seeds, fertilizers and machinery, leading to increased productivity and economic growth.
Additionally, farm loans contribute to rural development by providing income opportunities and improving infrastructure, ultimately reducing poverty in rural areas.
The government is putting more emphasis on agricultural production, which is one of the key driving forces of Bangladesh’s economy, they added.
On May 22, 2022, the central bank asked the country’s banks to disburse agricultural credit at 4% concessional interest rate for cultivating import substitute crops, including pulses, oilseeds, spices and maize.
In FY23, farmers received Tk32,829 crore in loans and repaid Tk33,010 crore.
Most of these loans were facilitated through non-governmental organizations, which charge interest rates ranging from 24% to 30%.
To address the challenge of reaching remote areas, banks allocate loan amounts to NGOs.
To encourage direct lending to the farmers, the Bangladesh Bank has instructed banks to disburse a minimum of 50% of their total disbursements through their own channels.
