Farm credit disbursement marks 28.9pc rise in May

Disbursements of farm credit posted a robust 28.9-percent year-on-year growth in May last, according to the latest data from Bangladesh Bank (BB).

Agricultural loans amounting to Tk 41.11 billion were disbursed in May this year, compared to Tk 31.91 billion during the same month in 2024.

However, the disbursement of agricultural credit totalled Tk 322.11 billion during July-May period of the 2024-25 fiscal year, reflecting a 3.26 per cent decrease from that of Tk 332.96 billion during the corresponding period of the previous fiscal.

The central bank data shows that farm loan recovery amounted to Tk 30.85 billion in May 2025 whereas it was recorded at Tk 34.26 billion in May 2024.

The farm credit disbursement target was fixed at Tk 380 billion for all scheduled banks in FY25, marking an 8.57 per cent increase over the previous fiscal's amount of Tk 350 billion.

Of the total, Tk 33.15 billion worth of disbursement was set for state-owned commercial banks (SOCBs), Tk 93 billion for state-owned specialized banks (SOSBs), over Tk 241.21 billion for private commercial banks (PCBs) and more than Tk 12.64 billion for foreign commercial banks (FCBs) in the FY'25.

In April 2025, agricultural credit disbursement by all scheduled banks amounted to over Tk 32.39 billion, which was 18.45 per cent higher and 5.74 per cent lower than that of Tk 34.36 billion in same month of 2024.

To promote agricultural development and ensure food security, Bangladesh Bank (BB) provides consistent supports 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 a circular of Agricultural Credit Department (ACD) on December 17, 2022, participating banks under this scheme receive a refinance facility from the central bank at 0.50 per cent rate of interest while farmers have to pay 4.00 per cent on such loans

As of May 2025, the outstanding farm credit stood at Tk 583.20 billion, up 3.53 per cent from Tk 563.31 billion in the corresponding period of FY2023-24, the central bank data showed.

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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