Farm technology neglected in agriculture loans

According to Bangladesh Bank, the commercial banks have been fixing their loan target for agriculture sector at 2% out of the total credit sanction annually. Under the agriculture loan scheme, there are different sub-sectors including crops, fisheries, livestock, seed production, silo and marketing and agriculture technology and machinery. Around 73% of the total disbursed agri loan has been using in crop sector, according to a recent study named ‘Uses and Impacts of Agri loan in Bangladesh’. Of them, 66.14% in direct crop, 3.38% for producing spices, 2.88% for crop preservation and marketing. While only 3.52% goes for introducing agri-technology and irrigation machinery, the Bangladesh Bank study report said. In addition, out of the total disbursed Agri loan, 7.12% has been using for fisheries, 2.73% for livestock and others while 12% loan has been disbursing with hidden information. The study had been run in 33 districts in Bangladesh, where 2,000 customers of 10 commercial banks   answers as respondents. The central bank directed that the credit have to go for purchasing agri machinery like power tiller, wedding and harvesting machine to reduce the production cost and crop damages. Bangladesh requires 7% growth of its GDP annually to reach the middle-income countries status by 20121. In that case, the agriculture sector has to provide 4% to 4.5% growths annually as the country’s land has been reducing rapidly due to rapid growth of population. Bangladesh produces a good number of cereal crops. Of them, the production of rice is more than its demand. According to the Ministry of Agriculture, the country produces 3.47 core tons of rice against the local demand of 3.41 core tons. Adding technology in the agriculture sector could make the country exportable which could also ensure desirable growth of the country. To make the government’s desire fulfill, the commercial banks have been working on it, we have already given instruction to all the related branches, so they will provide the loan in farm technology, said Jayed Bakht, chairman of Agrani Bank. He said: “We hope that we will succeed in this year, but the reality is---sometimes the branches could not receive enough application and the aspirant borrower cannot fulfill the mortgage condition, which ultimately stops the loan disbursement.” In 2015-16, 6 state-owned bank, 2 specialised banks, 38 private commercial banks and 9 foreign commercial banks, totally disbursed over Tk17,646 core, which is more than 8% of the target and 10% more than previous year. In current fiscal, the disbursement target of agri loan is TK17,550 crore. While talking on sub-sector wise agri-loan disbursements, Bangladesh Bank Executive Director Subhankar Saha said: “Generally, the crop sector alone gets around 60% of the total agri credit”. Most of the private commercial banks have been disbursing their credits through agent banking which is being considered as a bar in providing the loan proportionately, he added.