Agricultural credit recovery increases by 8% in July-March 

The recovery of agricultural credits has increased by 8 per cent during the first nine months of the current fiscal year 2024-2025 (FY25) compared to the same period of the previous fiscal.

In July-March of FY25, the recovery of agricultural credit by all scheduled banks increased by 8% to Tk27,443.31 crore compared to Tk25,410.74 crore during the same period of the fiscal year 2023-24 (FY24), according to the Bangladesh Bank latest data. 

This overall increase was primarily driven by the 14.26% rise in recoveries from Private Commercial Banks (PCBs) and 8.92% rise in recoveries from State owned Specialized Banks (SOSBs). 

In contrast, State-Owned Commercial Banks (SOCBs) and Foreign Commercial Banks (FCBs) recorded a decline of 1.72% and 52.08% respectively in recovery.

According to the data, recovery of agricultural credit by all scheduled banks was Tk3,019.60 crore in March of FY25, reflecting a 14.10% rise from Tk2,646.36 crore recovered in February of FY25 and a 9.84% increase compared to Tk2,749.03 crore recovered in March of FY24. 

The highest recovery of Tk3,764.51 crore was made in September last year, while the lowest, Tk2,553.79 crore, was recorded in July.

However, scheduled banks have disbursed Tk24,860.56 crore of agricultural loan during the first nine-month of the fiscal.
 
Of the total amount, state-owned banks disbursed over Tk10,133 crore, while foreign and private commercial banks together provided over Tk14,727 billion.

In July-March of FY25, agricultural credit disbursement by all scheduled banks remained crop-focused, with the crops sub-sector receiving 47% of total credit, up from 45% in the same period of FY24. 

Livestock and poultry rose slightly to 25% in July-March of FY25 from 24% in July-March of FY24, while fisheries increased to 15% in July-March of FY25 from 14% in July-March of FY24. 

Conversely, allocations to poverty alleviation and other sectors fell to 4% and 9% in July-March of FY25 from 6% and 11% in July-March of FY24 respectively. 

These shifts highlight a stronger emphasis on crops and fisheries. These shifts indicate a reallocation of resources toward more productive subsectors, with increased emphasis on crops and fisheries for contributing to food security, while support for poverty alleviation and other sectors has seen a relative decline.

Talking to BSS, a senior official of the central bank said BB provides consistent support to Bangladesh Krishi Bank (BKB) and Rajshahi Krishi Unnayan Bank (RAKUB) through a short-term agricultural refinance facility backed by government guarantee to promote agricultural development and ensure food security.

The agricultural credit disbursement target has been set at Tk38,000 crore for all scheduled banks in FY25, marking an 8.57% increase compared to the disbursement target of Tk35,000 crore for the previous fiscal year. 

The target of agricultural credit disbursement comprises Tk3,315.00 crore for SOCBs, Tk9,300.00 crore for SOSBs, Tk24,121.00 crore for PCBs, and Tk1,264.00 crore for FCBs for FY25.