Published: 12:42 AM, 18 August 2026
Central bank aims to disburse BDT 600 billion agro loans
Bangladesh Bank (BB) has set a target of Tk 600 billion for disbursement of agricultural and rural loans in the 2026-27 fiscal year aiming at vibrating rural economy though raising farm productivity.
The formal credit disbursement target has been increased by 53.85 per cent from the previous fiscal's target of Tk 390 billion. To achieve the projected target within the stipulated time, the central bank also instructed the commercial banks to allocate at least 4.0 per cent of their total lending to agricultural sector in place of existing ceiling of 2.50 per cent.
Of the total target, state-owned commercial and specialised banks have been assigned to disburse Tk 205 billion while private and foreign commercial banks will have to disburse Tk 395 billion in this fiscal under the programme. The central bank disclosed the new target on Monday at a press briefing after the meeting with top executives of the commercial banks at its headquarters with unveiling details of the Agricultural and Rural Credit Policy and Programme for FY2026-27.
The new policy places greater emphasis on ensuring credit access for genuine farmers, expanding financing in fisheries and livestock sectors, and supporting rural economic activities.
Under the policy, local agricultural extension officers, assistant agricultural officers, fisheries officers and livestock officers will play a role in identifying genuine farmers. Information from farmer cards issued by the government may also be used for this purpose.
After unveiling the policy, BB deputy director Dr Md Habibur Rahman said the share of the agriculture sector in the country's GDP is more than 10 per cent but the share of farm lending in the financial sector is only 2.50 per cent, which is very insufficient.
As the government plans to largely promote agriculture sector, which is one of the strongest pillars of the economy, he said they increased farm lending share to 4.0 per cent and directed the banks to take necessary steps in achieving the target.
The latest policy has also eased some requirements for borrowers in the fisheries and livestock sectors. Banks have been instructed to provide loans to organised groups of farmers and relax the prescribed membership limit where necessary.
Loans of up to Tk 0.5 million in the fisheries and livestock sectors will be eligible for collateral-free financing. Banks have also been advised to consider alternative forms of security, including personal, social and group guarantees, particularly for women and marginal farmers.
The central bank has instructed banks to ensure that borrowers are not charged fees or charges beyond those prescribed under the policy. It has also sought to simplify the process of obtaining loans under contract farming arrangements.
The policy incorporates provisions for revising the operational guidelines of the Bangladesh Bank Agricultural Development Common Fund (BBADCF) and facilitating loans to organised farmers and farming groups.
It also includes financing for hatchery fish fry production, poultry chicks and duck rearing. Two separate refinancing facilities-Tk 100 billion and Tk 30 billion-have been incorporated into the policy framework.
To address the impact of climate change, the policy also seeks to bring agricultural borrowers and customers under insurance coverage based on mutual agreements between banks and farmers.
New crops and agricultural activities, including sweet potato, ash gourd, mixed grains, rosemary, asparagus, sweet potato varieties, rubber fruit and egg-shell-based fertiliser production, have also been brought under the agricultural and rural credit programme.
The policy further provides for determining loan disbursement and crop-cutting periods for crops such as banana, papaya, mango, lemon, guava and chilli, as well as setting repayment periods from the time of harvesting.
BB spokesperson and executive director Arief Hossain Khan said adequate financing to the agricultural and rural sectors is essential for reducing poverty, creating employment, increasing incomes of marginal and poor people, and establishing a sustainable economy.
He said the central bank expects the new policy to contribute to higher agricultural production and supply, employment and income growth in rural areas while supporting overall macroeconomic stability and sustainable development.
Hailing the new policy, Managing Director and Chief Executive Officer of Southeast Bank PLC Md. Khalid Mahmood Khan said agriculture sector in the backbone of the economy and the bank has already intensified its focus on that area.
Citing data, the seasoned banker said the bank financed Tk 8.0 billion in the previous fiscal (FY'26). The bank needs to give loans equivalent to Tk 14 billion in this fiscal under the new policy, which is achievable.
He said the bank instructs their officers giving high focus on proper selection of the borrowers through cross-checking with the data of concerned government offices and regular post-disbursement monitoring to ensure proper usage of the fund.
