Agri loan disbursement witnessed a notable increase this July-November period of FY24, compared to the same period of FY23.
According to Bangladesh Bank data, the disbursement target for FY24 stands at Tk35,000 crore with 43.66% achieved in the first five months.
The payment of farm loans by scheduled banks in November also saw a modest hike than in October 2023.
Agriculture and rural credit in July-November compared to the corresponding period in FY23 rose by 19.55% to Tk15,280 crore from Tk12,777 crore.
According to the Bangladesh Bank data, scheduled banks disbursed a total of Tk3,319 crore this November, indicating a modest increase of 5.87%.
When compared, the disbursement for such loans was Tk3,135 crore in October.
By November, the outstanding balance with interest of farm credit reached Tk54,590 crore, marking a spike of 8.74% than the same period in the preceding fiscal year.
On the other hand, the total credit recovery was recorded at Tk14,418 crore in July-November 2023, which was 12.01% higher than the same period of last fiscal.
On 22 May 2022, the BB asked banks to disburse farm credit at a concessional interest rate of 4%, especially for cultivating import-substitute crops.
These crops include pulses, oilseed, spices and maize.
Farmers availed loans amounting to Tk32,829 crore in FY23. Their repayments totalled Tk33,010 crore.
The majority of these loans were facilitated through non-governmental organizations (NGOs).
Farmers accessed loans from banks at a lending rate of 8%, whereas loans acquired through NGOs carried higher rates ranging from 24% to 30%.
Due to inherent challenges faced by banks in directly reaching farmers at grass-roots level, they channel loan disbursements through NGOs, which, in turn, disburse the funds at elevated interest rates.
To provide farmers with loans at more favourable rates, the regulator has instructed banks to disburse a minimum of 50% of their total loan disbursements through their channels.
