Cenbank raises FY25 agri loan disbursement target by 9% to Tk38,000 crore
According to the central bank, the move has been taken considering the need for sufficient credit flow in the agricultural sector
This adjustment aims to boost agricultural production, support gross domestic product (GDP) growth, and help control high inflation.
The central bank revealed the new target during a press briefing at the Jahangir Alam Conference Hall in its headquarters in the capital today (29 August).
The decision to increase the target is based on the need for enhanced credit flow in the agricultural sector, it added.
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Under the Agricultural and Rural Credit Policy and Programme, the Bangladesh Bank has increased the loan disbursement target from the last fiscal year's Tk37,153.90 crore.
In the last fiscal year, banks distributed Tk35,000 crore for agriculture, falling short of the target by approximately Tk2,153 crore.
For the upcoming fiscal year, the Bangladesh Bank has set specific targets: Tk12,615 crore through state-owned commercial and specialised banks, Tk24,121 crore through private commercial banks, and Tk1,264 crore through foreign commercial banks.
Scheduled banks will finance half of the total loan amount, while the remaining half will be disbursed through non-governmental organisations (NGOs).
According to the latest labour force survey, 3.17 crore workers are engaged in agricultural professions, and the agriculture sector contributes 12% to the country's GDP.
To address the undisbursed portion of banks' agricultural and rural credit targets, the central bank has established the "Bangladesh Bank Agricultural Development Common Fund."
This fund is designed to invest the funds that banks fail to disburse. Banks that do not meet their targets will deposit the undisbursed amounts into this fund, where they will earn interest at a rate of 2%.
In a press release, the Bangladesh Bank stated yesterday, "To alleviate poverty, create employment, increase the income of marginalised and poor people, and establish a sustainable economy, it is essential to ensure a timely supply of sufficient funds to the agriculture and rural sectors."
"To control inflation and boost employment and income among the rural poor by enhancing the production and supply of the country's agricultural products, the Bangladesh Bank hopes that the aforementioned policies and programs will play an effective role in macroeconomic management and sustainable development," it added.
