Banks to provide Tk35,000 crore in loans to farmers in FY24

Commercial banks in the country have allocated Tk35,000 crore for loans to farmers in the current fiscal year 2023-24 to increase agricultural production. The new allocation is 13.60% more than the last fiscal year. In the last financial year, the target for agricultural loans was Tk30,811 crore.

Bangladesh Bank Deputy Governor AKM Sajedur Rahman Khan announced the news Agricultural & Rural Credit Policy and Programme on Sunday (6 August). 

Considering the demand for agricultural and rural loans, the state-owned commercial and specialised banks have set a target of Tk12,030 crore, private banks Tk21,923 crore and foreign commercial banks Tk1,047 crore in the current fiscal year.

In the last fiscal year 2022-23, banks disbursed a total of Tk32,830 crore in agricultural and rural loans, which is 106.55% of the total target for the financial year.

According to Bangladesh Bank, a total of 33,04,811 people got agricultural and rural loans in the last fiscal year. Of these, 3,618,545 loans were available through banks' own networks and MFI linkages.  As many as 18,81,933 women have received agricultural and rural loans worth Tk12,752 crore.

Besides, 27,36,087 small and marginal farmers received Tk22,402 crore from various banks and 3,449 farmers from char, haor and other backward areas received Tk18 crore in the last fiscal year.

In light of evolving global conditions and the imperative of food security, banks are mandated to prioritise lending to the agricultural sector.

Beyond the target of commercial banks, Bangladesh Samabaya Bank Limited and Bangladesh Rural Development Board (BRDB) set a target of Tk26 crore and Tk1,423 crore from their own financing respectively.

Banks will be able to use their own network (branches, sub-branches, agent banking, contract farming, group loan disbursement) and bank-MFI linkages to achieve the target of disbursement of loans.

In this case, the amount of loan disbursed through the bank's own network should be at least 50% of the target. Previously was 30%.

Under the Agricultural & Rural Credit Policy and Programme, loans will have to be disbursed to new farmers on priority basis. The maximum limit for loans for income-generating activities in rural areas will be Tk5 lakh. 

In the fisheries sector, a minimum of 13% of the target and in the livestock sector, a minimum of 15% of the target have to be disbursed, the BB added.