Agricultural credit recovery increases by 8pc in July-March

The recovery of agricultural credits has increased by 8 per cent during the first nine months of the current fiscal year 2024-2025 (FY25) compared to the same period of the previous fiscal.

In July-March of FY25, the recovery of agricultural credit by all scheduled banks increased by 8 percent to Tk 274.43 billion compared to Tk 254.11 billion during the same period of the fiscal year 2023-24 (FY24), according to the Bangladesh Bank (BB) latest data.

This overall increase was primarily driven by the 14.26 percent rise in recoveries from Private Commercial Banks (PCBs) and 8.92 percent rise in recoveries from State owned Specialized Banks (SOSBs).

In contrast, State-Owned Commercial Banks (SOCBs) and Foreign Commercial Banks (FCBs) recorded a decline of 1.72 percent and 52.08 percent respectively in recovery.

According to the data, recovery of agricultural credit by all scheduled banks was Tk 30.20 billion in March of FY25, reflecting a 14.10 percent rise from Tk 26.46 billion recovered in February of FY25 and a 9.84 percent increase compared to Tk 27.49 billion recovered in March of FY24.

The highest recovery of Tk 37.64 billion was made in September last year, while the lowest, Tk 25.54 billion, was recorded in July.

However, scheduled banks have disbursed Tk 248.61 billion of agricultural loan during the first nine-month of the fiscal.

Of the total amount, state-owned banks disbursed over Tk 101.33 billion, while foreign and private commercial banks together provided over Tk 14,727 billion.

In July-March of FY25, agricultural credit disbursement by all scheduled banks remained crop-focused, with the crops sub-sector receiving 47 percent of total credit, up from 45 percent in the same period of FY24.

Livestock and poultry rose slightly to 25 percent in July-March of FY25 from 24 percent in July-March of FY24, while fisheries increased to 15 percent in July-March of FY25 from 14 percent in July-March of FY24.

Conversely, allocations to poverty alleviation and other sectors fell to 4 percent and 9 percent in July-March of FY25 from 6 percent and 11 percent in July-March of FY24 respectively.

These shifts highlight a stronger emphasis on crops and fisheries. These shifts indicate a reallocation of resources toward more productive subsectors, with increased emphasis on crops and fisheries for contributing to food security, while support for poverty alleviation and other sectors has seen a relative decline.

The central bank said BB provides consistent support to Bangladesh Krishi Bank (BKB) and Rajshahi Krishi Unnayan Bank (RAKUB) through a short-term agricultural refinance facility backed by government guarantee to promote agricultural development and ensure food security.

The agricultural credit disbursement target has been set at Tk 380.00 billion for all scheduled banks in FY25, marking an 8.57 percent increase compared to the disbursement target of Tk 350.00 billion for the previous fiscal year.

The target of agricultural credit disbursement comprises Tk 33.15 billion for SOCBs, Tk 93.00 billion for SOSBs, Tk 241.21 billion for PCBs, and Tk 12.64 billion for FCBs for FY25.