Farm loans until March 70% of target

Agri loans disbursed in the nine months since July met 70% of the annual target, amounting to more than Tk18,500 crore. The disbursement in the period a year ago was the same.

The latest BB circular relating to farm loans shows that the target was to distribute Tk 26,290 crore in loans.  

The collection of loans, Tk 19,774 crore, was higher than the distribution during the time.

Default loans in the agricultural sector stood at Tk 4,298 crore around the same time. The figure was Tk4,383 crore for the July-February period, meaning that the amount in default loans was reduced by Tk 85 crore within a month. 

On this, Bangladesh Krishi Bank Managing Director Ali Hossain Prodhania said the authorities had strengthened the mechanism of loan collection.

The loan collection will get faster after the pandemic, he said, adding that farmers were more serious about repaying loans than other loan recipients.

Apart from the farm loan scheme, the government distributed Tk 3,722 crore until March under Tk 5,000-crore refinancing scheme designed for this fiscal year. Moreover, Bangladesh Rural Development Board granted Tk 824 crore in loans in the same period.

Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue, said loan disbursement under the refinancing scheme should be increased.

If farmers do not get loans timely, the cultivation of crops meets hindrance but borrowers still have to make repayments, he said.

Moazzem also suggested enhancing the capacity of private banks, apart from the specialised banks, to disburse and collect agricultural loans, and encouraging the use of technology in farming and of solar technology in irrigation.

Loan coverage should also be expanded so that vegetable or onion growers can get benefit from storage facilities, he said.

The people who have returned to their village homes from abroad or cities and are interested in farming should also have access to loans, Moazzem added.