BB sets farm loan target at Tk24,124cr for FY20

Bangladesh Bank on Tuesday fixed farm loan target for the current fiscal year at Tk24,124 crore, up by 10.66% from last year’s target.

“Farm loan target has been fixed  considering the rising demand for agricultural and rural credit,” said SM Moniruzzaman, deputy governor of Bangladesh Bank, while unveiling the Agriculture and Rural Credit Policy and Programme for 2019-20 at the central bank.

Moniruzzaman said BB published the annual Agricultural and Rural Credit Policy and Programme for the current fiscal year for achieving the prime objectives of sustainable development goals (SDGs) that included eradication of poverty, ensuring safe and nutritious food and maintaining good health for the people of the country.

Considering the increased demand for agricultural and rural credit, disbursement target for the state-owned and specialized commercial banks has been set at Tk10,375 crore and for the private and foreign commercial banks at Tk13,749crore.

Last fiscal year, scheduled banks disbursed Tk23,616.25crore as farm loan, which was 8.33% higher than the target of TkTk21,800 crore. 

A total of 38,83,424 borrowers got the farm credit in the last 2018-2019 fiscal year, according to central bank data.

Of the total, women borrowers were 16,01,856 receiving Tk7,190.55 crore.  

Small and marginal farmers numbering 29,89,237 received around Tk16,322.87 crore from the banking sector during the period. Besides, Tk31.61 crore was disbursed among 9,950 farmers of char, haor and less developed areas of the country, says the data.

In the current fiscal year, banks will disburse 60% of the targeted agricultural loan in crop sector, 10% in fisheries, and 10% in the livestock sector and the remaining portion to be disbursed in another sectors linked to rural economy, according to the policy.

The new agricultural credit policy includes some new concepts to ensure food security of the people and to develop a sustainable agricultural credit system.

These are reducing dependence on micro-finance institutions (MFIs), disbursing credit through own branches and agent banking of banks, credit for cultivating cashew nut, rambutan and potato.

CIB report from Bangladesh Bank has been made mandatory for farm loan above Tk250,000.

The policy includes new concepts on providing loans for seed production and sale, rearing goat, and sheep and cattle fattening, and Turkey bird rearing.

The major features of the credit policy include settling loan by 10 days from the day of loan application and providing eligible tenant farmers with farm credit loan with easy terms and procedures.

The Agriculture and Rural Credit Policy and Programme also says that women and high-valued crop sector will get priority in receiving farm credit.

Besides, the policy also includes new credit policy for commercial production of silk and implementing the piloting activities of agriculture and rural credit simplification adopted by access to information (a2i).