BB raises farm loan target by 54%, widens collateral-free loan coverage 

The Bangladesh Bank has raised the agricultural and rural credit disbursement target by 53.8% to Tk60,000 crore for fiscal year 2026-27, while expanding collateral-free lending to fisheries and livestock and widening access for women and marginal farmers.

Previously, farmers cultivating at least five acres' land were eligible for collateral-free loans of up to Tk5 lakh.

The new target is Tk21,000 crore higher than the Tk39,000 crore set for the previous fiscal year. Of the total, Tk20,845 crore has been allocated to state-owned commercial and specialised banks and Tk39,155 crore to private and foreign commercial banks, increasing the latter's role in agricultural lending.

The figures were disclosed today (17 August) at Bangladesh Bank headquarters at the launch of the Agricultural and Rural Credit Policy and Programme for FY2026–27.

Bangladesh Bank Deputy Governor Habibur Rahman said agriculture's share of total lending had been raised from 2.5% to 4% because agricultural credit remains disproportionate to the sector's contribution to national income. 

Collateral-free loans expanded

The new policy allows cattle, fish and poultry farmers to obtain loans without collateral. For loans of up to Tk5 lakh, banks have been instructed not to accept any charge documents other than those specifically required under the policy.

A senior Bangladesh Bank official, speaking on condition of anonymity, said banks may adjust loan limits based on farm size or if production costs are not aligned with market prices.

Individuals or groups of farmers and farm owners can also access loans for fisheries and livestock activities, including duck and poultry chick production, hatcheries and fish fry production.

The policy also prioritises climate-change adaptation, contract farming, new crop cultivation and post-harvest management.

For women and marginal farmers, it expands access to collateral-free loans and alternative forms of collateral. A woman farmer's transaction record from regular loan repayment through bKash or other MFS, for example, may be considered alternative collateral. Records of purchasing and selling goods on credit and repaying within the stipulated period may also qualify.

Banks have also been encouraged to use personal, social and group guarantees instead of conventional land or immovable property as collateral for women and marginal farmers.

The programme also includes summaries of the Tk10,000 crore refinancing scheme and the Tk3,000 crore refinancing fund, along with proposals to expand financing facilities for small farmers.

Tighter checks on genuine farmers

Habibur Rahman said the policy's objective was not simply to increase agricultural lending but to ensure loans reach genuine farmers on time and are used productively.

He said farmers holding cards issued by the Department of Agricultural Extension (DAE) pose relatively lower lending risks. For borrowers without farmer cards, banks must verify whether they are genuine farmers. If a loan is disbursed without such verification, the bank will be held responsible.

Loans to follow regional demand

Under the new policy, banks have been instructed to follow an "area approach" and set agricultural lending according to regional production and demand.

They can use government crop-zoning data, the "Khamari" app, Bangladesh Bureau of Statistics data and information from the DAE, Department of Fisheries and other agencies. 

Habibur said lending targets should reflect dominant local production, such as rice, potatoes or fish. Loan limits have been set based on production volume, land size and costs of fertiliser, seeds, labour and other inputs.