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Ansar-VDP Development Bank has sought extension of the state guarantee on a Tk 10-billion "Agriculture and Rural Credit" facility for another three years, aiming to help sustain economic momentum for marginalized communities and ensure national food security.
The Bank made the request in a letter to the Ministry of Finance (MoF), sources said.
According to an official document, the Tk 10-billion credit support was sanctioned by Bangladesh Bank (bb) and released in four phases between September 2022 and January 2026.
The fund is being utilised to provide low-interest credit to members of the Bangladesh Ansar and Village Defence Party (VDP), many of whom live near or below the poverty line.
Interest rate of the loan is 8.0 per cent. The total beneficiaries of the lending facility are around 31,329 Ansar & VDP members.
So far, some Tk 7.41 billion has been disbursed under the loan, the sources said.
The bank highlighted that its primary clients consist of approximately 6.1 million Ansar and VDP members, who often lack access to traditional banking systems.
Without such a credit facility, those individuals are frequently forced to take loans from NGOs at higher rates of interest, falling into a cycle of debt.
The current state guarantee is to expire on August 16, 2026, it was learnt.
The bank management said repayment of as much as Tk 10.32 billion (including interest) by that date could trigger a severe liquidity crisis for it.
Furthermore, with the upcoming Aman, Boro, and winter vegetable seasons, the demand for credit among farmers is expected to surge.
To help maintain the continuity of the credit flow and support rural production activities, the bank has urged the government to extend the guarantee period from August 16, 2026, to August 15, 2029.
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