BB raises farm loan disbursement target by 7.98%

Bangladesh Bank (BB) has raised the agriculture and rural loan disbursement target by 7.98 percent to Taka 28,391 crore for the current fiscal year (FY22), said the central bank in a release on Thursday. The disbursement target for the immediate past fiscal year (FY20) was Taka 26,292 crore. "

To combat with the adverse effect of Covid-19 pandemic and to achieve government's three prime objectives of sustainable development goals (SDGs)- eradication of poverty, ensure safe and nutritious food and developing rural economy through a plenty of credit disbursement in the rural area," said the central bank in its Annual Agricultural and Rural Credit Policy and Program for FY22, told BSS.

Considering pandemic situation and the increased demand of agricultural and rural credit, disbursement target for the state-owned and specialized commercial banks has been fixed at Taka 11,045 crore while the private and foreign commercial banks are tasked to disburse Taka 17,346 crore for FY22. In FY21, all the scheduled commercial banks disbursed agricultural and rural credit of Taka 25,511.35 crore against Taka 26,292 crore, which is approximately 97.03 percent of the affixed target, said BB. 

The agricultural and rural credits were disbursed among 30,55,166 people in total of which 16,05,947 women borrowers have received Taka 9,287.96 crore. Beside this, 22,45,512 small and marginal farmers have received around Taka 17,639.93 crore from different banks. Moreover, Taka 33.96 crore was disbursed among 7,796 farmers of char, haor and less developed areas of the country. To ensure the food security of the people and to develop a sustainable agricultural credit system, there are some new inclusions in the current agricultural credit policy.

Some of them are: Credit Norms for rearing 'Sonali Hen' under the poultry subsector, Credit Norms for rearing Buffalo and 'Garol Sheep' under the livestock subsector, reducing interest rate of Agricultural Credit from 9 percent to maximum 8 percent, considering the demand of the farmers and actual scenario of farming activities in a particular area per acre credit limit can be increased or decreased up to 15 percent from the mentioned credit norms in the Agricultural and Rural Credit Policy and  increasing the per acre credit limit for fish cultivation.

The central bank said effective steps are taken to supervise the disbursement of agricultural credits. It is mentionable here that Bangladesh Bank had created a refinance scheme of Taka 5000 crore from its own fund for working capital based agricultural sector to mitigate the crisis due to Covid-19 pandemic through a circular in 2020.

The BB said the tenure of the scheme ended in June, 2021 and under this scheme the scheduled banks have disbursed Taka 4,295.14 crore. Besides this, to disburse agricultural credit to crops and grains sector at low cost to maintain the normalcy of supply and production of foods a circular was issued in 2020 with the instruction of disbursing agricultural credit at 4 percent concessional interest rate.Under this scheme Taka 4,880.71 crore has been disbursed up to June, 2021.