Agri loan disbursement drops 6.78pc in Jul-Mar

Disbursement of agricultural credits has declined by 6.78 per cent during the first nine months of the current fiscal year 2024-2025 compared to the same period of the previous fiscal.

Scheduled banks have disbursed agricultural loan to the tune of over Tk 248.60 billion during the period while it was Tk 266.67 billion in the previous fiscal year, Bangladesh Bank (BB) data reveals.

Of the total amount, state-owned banks disbursed over Tk 101.33 billion, while foreign and private commercial banks together provided Tk 147.27 billion.

Among the scheduled banks, Bangladesh Krishi Bank (BKB) provided the highest amount of loan - over Tk 60.92 billion. In contrast, foreign commercial bank Woori Bank and private commercial bank Padma Bank could not disburse any loans during the period.

To promote agricultural development and ensure food security, Bangladesh Bank (BB) provides consistent support to Bangladesh Krishi Bank (BKB) and Rajshahi Krishi Unnayan Bank (RAKUB) through a TK 50 billion short-term agricultural refinance facility backed by government guarantee.

According to the circular of Agricultural Credit Department (ACD) on December 17, 2022, participating banks under this scheme receive a refinance facility from the central bank at an interest rate of 0.50 per cent, while farmers benefit from a maximum rate of 4.00 per cent (simple interest).

The credit recovery was recorded at Tk 274.43 billion in July-March of the current FY, up from Tk 254.10 billion in the same period of last FY.

The outstanding balance of farm credit stood at over Tk 569.65 billion during July-March of the current FY, marking a slight increase from Tk 565.65 billion during the same period in the preceding FY, the central bank data shows.

For the current fiscal year, the agricultural credit disbursement target has been set at Tk 380 billion, reflecting an 8.57 per cent increase from the previous year's target of Tk 350 billion and a 2.28 per cent rise compared to the actual disbursement of Tk 371.53 billion.

The disbursement target includes Tk 33.15 billion for state-owned commercial banks (SOCBs), Tk 93 billion for state-owned specialised banks (SOSBs), Tk 241.21 billion for private commercial banks (PCBs), and Tk 12.64 billion for foreign commercial banks (FCBs).

To meet the disbursement target, banks are allowed to use their own networks (branches, sub-branches, agent banking, contract farming, and group loans) and bank-MFI linkages.

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