Overdue agricultural credit stood at Tk6,950 crore at the end of April this year, up by 10.75% from Tk6,274 crore at the end of April 2022.
The credit as a percentage of outstanding balance was 13.45% at the end of April 2023 and 12.74% at the end of April 2022, according to Bangladesh Bank data.
However, the outstanding balance of agricultural credit increased by nearly 5% to nearly Tk2,400 crore in just a year, till April, according to data.
The data said that at the end of April 2023, the outstanding balance of agricultural credit including interest stood at Tk51,660 crore.
Such overdue agricultural loans weaken the financial health of banks.
As a result, they face trouble with rolling out fresh loans.
The private commercial banks have the highest share of agricultural credit lent to the farmers and farms.
They have 56% share of the credit followed by state-owned specialized banks with 33.3%.
Bangladesh Rural Development Board (BRDB), Bangladesh Shomobay Bank Limited (BSBL), Palli Karma Shahayak Foundation, Microcredit Operations by Grameen Bank and other large NGOs also disburse loans to the farmers.
Commercial banks can disburse directly up to 30% while the rest of the amount is disbursed by micro credit financial institutions where the rate of interest is over 20%.
On the contrary, the rate of interest for loans from commercial banks lent directly is around 8%.
However, the agricultural credit disbursement target was fixed at Tk30,911 crore for FY23, which was 8.88% higher than Tk28,391 crore targeted in FY22.
During July-April 2023, disbursement of agriculture credit stood at Tk26,930 crore or up by 87.12% of the total disbursement target of FY23.
In April 2023, actual credit disbursement stood at Tk2,807 crore or 24.62% higher than that of the same month of the preceding year.
In April 2023, Grameen Bank and ten large NGOs disbursed Tk12,608 crore as microcredit and recovered Tk13,907 crore.
