Bangladesh Bank yesterday formed a refinance scheme of Tk 5,000 crore for farmers as part of the government’s efforts to stave off food scarcity amid a looming global crisis in 2023 brought on by the Ukraine war.
Earlier on Monday, Prime Minister Sheikh Hasina in a cabinet meeting directed the relevant authorities to redouble their efforts to raise food production and maintain sufficient food stock.
Accordingly, the government yesterday approved the import of 1.8 lakh tonnes of fertiliser so that farmers do not face any crisis in the Boro season by the end of December. Boro accounts for the lion’s share of Bangladesh’s rice production, followed by Aman.
This year, the country witnessed an extended drought that hampered Aman production. Afterwards, some natural calamities like flash floods and cyclone Sitrang also affected rice production. Hence, all efforts are on to ensure a bumper Boro harvest.
Now, the central bank is playing its part.
The price of several food items has gone up in the global market, which is why the central bank has formed the fund such that farmers can avail funds at a lower interest rate, according to the BB notice.
Under the scheme, farmers will be able to take loans at a 4 percent interest rate.
Banks will be allowed to take a loan at 0.50 percent from the fund, meaning that they enjoy an interest margin of 3.5 percent after disbursing the fund to farmers.
At present, banks offer all loans except credit cards at a 9 percent interest rate.
Farmers will have to repay the fund within 18 months including a grace period of three months.
The loans will have to be disbursed to different sectors including the cultivation of rice, vegetables, fruits and flowers, fish and poultry farming and milk production.
Farmers who cultivate paddy, fruit and vegetables, and flowers will be able to get Tk 2 lakh in loans without any collateral.
Banks will be able to disburse loans until June 30 next year.
No defaulter will enjoy any loan from the scheme.
Lenders will have to ink participation agreements with the central bank to disburse funds from the scheme.
They will not be allowed to disburse any loan using the linkage of the microfinance institutions channel.