Farm credit disbursement grew by nearly 12 per cent in the first-half of the current fiscal year, driven by seasonal demand for such loans, officials say.
Banks released agricultural credit worth Tk 120.78 billion in the July-December of FY ’21, up from Tk 108.01 billion in the same period of the previous fiscal, according to the Bangladesh Bank’s (BB) latest statistics.
Talking to the FE, a BB senior official said the central bank is working on achieving the agriculture loan disbursement target by the end of this fiscal.
To gear up the drive, the central bank met senior officials of eight public banks on Thursday for reviewing the latest situation of the agriculture loan disbursement and recovery performance, according to the central banker.
The state-owned banks are-Sonali Bank Limited, Janata Bank Limited, Agrani Bank Limited, Rupali Bank Limited, BASIC Bank Limited, Bangladesh Development Bank Limited (BDBL), Bangladesh Krishi Bank (BKB) and Rajshahi Krishi Unnayan Bank (RAKUB).
General manager of the Agricultural Credit Department of the central bank Abdul Hakim presided over the monthly review meeting.
At the review meeting, the central bank asked the state banks to take effective measures for boosting farm credit disbursement so that the target can be met by the end of this fiscal.
The BB official hoped the disbursement will pick up pace as the cropping season is underway.
“We’re motivating and persuading the bankers continuously to work towards achieving the farm credit disbursement target,” the central banker noted.
Of the Tk 120.78 billion, eight state lenders disbursed Tk 54.41 billion, and the remaining Tk 66.37 billion was disbursed by the private commercial banks and foreign commercial banks.
Meanwhile, all banks achieved 45.94 per cent of their FY ’21 agricultural loan disbursement target, fixed at Tk 262.92 billion.
Also, the recovery of farm loans rose to Tk 140.91 billion during the period under review from Tk 115 billion in the same period of the previous fiscal.
“The disbursement of agriculture credit will be gain more speed in the second-half than the first half of FY ’21,” Md. Ali Hossain Prodhania, managing director of BKB, told the FE while predicting the future trend in farm credit disbursement.
The senior banker also said the disbursement of agricultural loans will exceed the annual target by the end of this fiscal, though several financial packages are being implemented to help revive the economy, battered by Covid-19 pandemic.
“We’re providing farm credit giving priority to fresh borrowers aimed at bringing more unbanked people into the banking system,” Mr Prodhania explained.
However, outstanding agricultural credit in the country’s banking sector rose to Tk 440.89 billion in the first six months of this fiscal year from Tk 430.26 billion in the same period of FY’20, the BB data showed.