Banks disbursed Tk聽26,667 crore in agricultural loans in July-March of the 2023-24 financial year, which accounts for 76.19 per cent of the total disbursement target for FY24, according to Bangladesh Bank data.
The recovery amount of agricultural loans reached Tk聽25,410 crore in the nine months of FY24, which was 4.92 per cent higher than that of the same period of the preceding year.
The disbursement target for agricultural credit in FY24 is Tk聽35,000 crore, an increase of 13.6 per cent from the previous financial year鈥檚 target of Tk聽30,811 crore.
The outstanding balance, including interest, stood at Tk聽56,565 crore, marking a 10.31-per cent increase from the previous financial year.
Overdue of agricultural credit stood at Tk聽10,175.78 crore at the end of March 2024, which is 44 per cent higher than overdue of Tk 7,066.54 at the end of March 2023.
State-owned commercial banks and specialised banks aimed to disburse Tk聽12,030 crore, while private banks and foreign commercial banks targeted to release Tk聽22,970 crore in farm loans in FY24.
Crop sub-sector received 45 per cent of the of the disbursed credit, followed by live-stock and poultry 24 per cent, fisheries 14 per cent, others 11 per cent and poverty alleviation 6 per cent.
In March 2024, Grameen Bank and 10 large non-governmental organisations disbursed Tk聽16,914.00 crore as microcredit and recovered Tk聽15,700.55 crore.
As agriculture plays a vital role in the country鈥檚 economy, issuing credit to farmers has become crucial to keeping the agriculture-based rural economy vibrant, especially amid the ongoing global economic crisis.
More than 40 per cent of the country鈥檚 workforce is directly employed in the agriculture sector.
Farm loans enable farmers to invest in inputs like seeds, fertilisers and machinery, leading to increased productivity and economic growth.
Farm loans also contribute to rural development by providing income opportunities and improving infrastructure in rural areas.
On May 22, 2022, the central bank instructed the country鈥檚 banks to disburse agricultural credit at a concessional interest rate of 4 per cent for cultivating import substitute crops, including pulses, oilseeds, spices and maize.
In the 2022-23 financial year, farmers received Tk 32,829 crore in loans and repaid Tk聽33,010 crore.
Most of these loans were channelled through NGOs, which charge interest rates ranging from 24 per cent to 30 per cent.
To address the challenge of reaching remote areas, banks allocated loan amounts to NGOs.
To encourage direct lending to farmers, the Bangladesh Bank has instructed banks to disburse a minimum of 50 per cent of their total disbursements through their own channels.