Riding on the success of meeting the previous fiscal year’s (FY) farm and rural credit-disbursement target, the central bank has raised the disbursement target by Tk 41.89 billion for this FY, 2023-24, officials said.
With a 13.60-percent increase from the previous fiscal’s (FY 23) target of Tk 308.11 billion, the Bangladesh Bank (BB) has set the target of agriculture and rural credit disbursement for banks at Tk 350 billion in FY 24.
Considering the increased demand of agricultural and rural credit, disbursement target for the state-owned and specialised commercial banks has been fixed at Tk 120.30 billion, and for the private and foreign commercial banks at Tk 229.70 billion.
To ensure low-cost credit for the farmers, the BB, at the same time, raised the loan disbursement ratio from 30 per cent to 50 per cent of each bank’s target through its own network instead of micro-finance institutions (MFIs).
The BB on Sunday announced the Agricultural and Rural Credit Policy and Programme for the financial year 2023-2024 to achieve the government’s three prime objectives of Sustainable Development Goals (SDGs). These are – eradicating poverty, ensuring safe and nutritious food, and developing rural economy through plenty of credit disbursement in the rural areas.
In a press conference at the BB headquarters in presence of the top executives of several commercial banks, BB Executive Director Md Nurul Amin said the target of agriculture and rural credit disbursement for banks was Tk 308.11 billion in FY 23.
In that FY, all the scheduled commercial banks disbursed agricultural and rural credit amounting to Tk 328.29 billion, which was approximately 106.55 per cent of the target, he informed.
According to him, the credit was disbursed among a total of 36,18,545 individuals, of whom 18,81,933 women borrowers received Tk 127.52 billion. Besides, 27,36,087 small and marginal farmers received around Tk 224.02 billion from different banks.
Moreover, over Tk 180 million was disbursed among 3,449 farmers of the country’s char, haor and less developed areas, he added.
Speaking as the chief guest, BB Deputy Governor A K M Sajedur Rahman Khan said the share of agriculture sector to the country’s GDP is 11.38 per cent, while it accounts for over 45 per cent of the overall labour force. Considering the sector’s contribution, the government is giving top priority to it.
He called upon the banks to fulfill the agriculture credit disbursement target with intensified focus.
“If any bank fails to meet the target, it has to deposit the undisbursed credit portion to the Bangladesh Agriculture Development Common Fund for 18 months at the rate of 2.0 per cent interest.”
The BB deputy governor said there are some new inclusions in the current agricultural credit policy, like enhancing disbursement ratio from the existing 30 per cent to 50 per cent of individuals bank’s target through its own network.
Under this new policy, the banks have been instructed to disburse minimum 13 per cent of their respective credit target in fisheries sector and minimum 15 per cent in livestock sector along with disbursing agri-credit for agriculture at rooftop and for cultivating venami prawns, crab, kuccia, he added.