Farm loan disbursement by banks was Tk 9,469.34 crore in the first four months (July-October) of the current financial year 2022-2023.
The amount disbursed is 30.63 per cent of the total annual disbursement target.
In October 2022, the disbursement of agricultural credit stood at TK 2,884.97 crore, which is 7.06 per cent higher than the disbursement of Tk 2,694.62 crore in the same month of the preceding year, according to the Bangladesh Bank.
The agricultural credit disbursement target has been set at Tk 30,911 crore for FY23, which is 8.88 per cent higher than Tk 28,391 crore targeted in FY22.
The central bank’s pressure on banks to expedite disbursement of loans to the farmers was one of the key reasons for the increase, BB officials said.
The total recovery position of agricultural credit was Tk 9,780.32 crore in July-October of 2022, which is 28.73 per cent higher than the recovery in the same period of the previous year.
The outstanding balance, including interest, of the agricultural credit stood at Tk 50,468 crore at the end of October, which is 8.88 per cent higher than Tk 46,353.8 crore at the end of October 2021.
The disbursement target of all state-owned commercial banks and state-owned specialised banks together was set at Tk 11,758 crore and that of private commercial banks and foreign commercial banks together was set at Tk 19,153 crore.
As agriculture plays a vital role in the country’s economy, issuing credit to the farmers has become crucial to keep the agriculture-based rural economy vibrant at a time when the industry and service sectors are struggling due to the ongoing global economic crisis, the officials said.
As much as 40.6 per cent of the country’s workforce is directly employed in the agriculture sector.
The government is giving more emphasis on agricultural production, which is one of the key driving forces of Bangladesh’s economy.
On May 22, 2022, the central bank has given an emphasis on disbursement of agricultural credit at 4 per cent concessional interest rate for cultivating import substitute crops (pulses, oilseeds, spices and maize).
In addition, the BB on June 27, 2022 announced disbursement of minimum 40 per cent unused outstanding amount of Tk 3,000 crore as refinance scheme previously issued through a September 14, 2021 circular to the flood-affected farmers.