Bangladesh Bank raises farm loan disbursement target

Bangladesh Bank has set a target to disburse Tk 28,391 crore in farm loans this fiscal year, up 8 per cent from that a year ago, aiming to combat the adverse impacts deriving from the Covid-19 pandemic.

Banks collectively gave out Tk 25,511 crore last fiscal year, which was 97 per cent of their annual target, according to the central bank's annual agricultural and rural credit policy and programme.

The central bank has incorporated some new aspects in its policy from this fiscal year to ensure food security and develop a sustainable agricultural credit system.

This includes enabling farm loans to be enjoyed by farmers involved in rearing Sonali chickens, buffalo and Garol sheep for commercial purposes.

The Sonali is a cross-breed of Rhode Island Red cocks and Fayoumi hens having an appearance similar to that of local chickens and introduced in northern parts of Bangladesh in 1996-2000.

In Bangladesh, buffaloes are seen as draft animals used for ploughing and pulling carts.

Various authors have reported that the breeding of the highly prolific Garole breed of sheep is localised in the Sunderban region of Bangladesh and West Bengal.

Considering the demand of the farmers and actual scenario of farming activities in a particular area, per acre credit limit can be increased by up to 15 per cent.

The central bank has also increased the per acre credit limit for fish cultivation.

About 43.8 lakh tonnes of fish are produced annually in Bangladesh, which ranks fifth in aquaculture and third in inland open water capture fish production in the world.

The policy said it would strengthen the supervision on agricultural credits such that farmers can smoothly avail loans they desire.

It mentioned that the central bank had recently reduced the farm loan interest rate to 8 per cent from the previous 9 per cent considering the agriculture sector as one of priority.

The policy said the BB had created a refinance scheme of Tk 5,000 crore last year from its own fund to be disbursed as working capital for the agricultural sector to mitigate the crisis due to Covid-19 pandemic.

The tenure of the scheme ended in June. Under the scheme, banks disbursed Tk 4,295 crore.

In addition, the central bank took an initiative to disburse agricultural credit for the crop and grain sector at a 4 per cent concessional interest rate.

Under it, banks disbursed Tk 4,880 crore till June.