• Thursday, Oct 06, 2022
  • Last Update : 10:24 am

Farm credit lending reduced to 8%

  • Published at 02:23 pm April 22nd, 2021
Good as gold women farmers
Syed Zakir Hossain/Dhaka Tribune

The new interest rate would be effective from April 1 this year

Bangladesh Bank on Thursday slashed the interest rate for agricultural loans to 8% from the previous 9% for ensuring more disbursement of low-cost loans in the agriculture sector and boost production amid the Covid-19 pandemic.

The new interest rate would be effective from April 1 this year.

The central bank re-fixed the interest rate of farm and rural credit in the context of the contribution of the agricultural sector to the national economy, said a central bank notice issued on the day.

The notice also said that the country’s economic activities were being disrupted since last year owing to the global pandemic.

As a result, the country’s agricultural sector also suffered like other sectors, which prompted the central bank to take such an initiative, said Bangladesh Bank officials.

In June 2017, The BB had set the lending rate to 9%, which in turn was a reduction from 10%, as agriculture was designated to be a priority sector.

Then, on April 1 last year, the central bank brought down the interest rate to 9% of all kinds of loans, barring credit cards, to provide some breathing space to the country’s businesses.

However, now the weighted average interest rate of lending stood at 7.48% owing to the low demand of credit amid the pandemic.

In the first seven months of the current fiscal year, the country’s lenders disbursed Tk14,148.7 crore to farmers, which was 53.8% of the total disbursement target for fiscal 2020-21, BB data said.

Alongside the regular farm loan disbursement process, as many as 43 banks are implementing the Tk5,000 crore rescue package announced by the government on April 13 last year for the agriculture sector.

The tenure for the loans was set at 18 months, including a grace period of six months.

Banks will borrow the funds at 1% interest rate and lend at 4% to farmers in line with the BB guidelines.

As of 2020, the 43 lenders had disbursed at Tk3,350.8 crore among 143,747 farmers, according to the data from the central bank.

Facebook 50
blogger sharing button blogger
buffer sharing button buffer
diaspora sharing button diaspora
digg sharing button digg
douban sharing button douban
email sharing button email
evernote sharing button evernote
flipboard sharing button flipboard
pocket sharing button getpocket
github sharing button github
gmail sharing button gmail
googlebookmarks sharing button googlebookmarks
hackernews sharing button hackernews
instapaper sharing button instapaper
line sharing button line
linkedin sharing button linkedin
livejournal sharing button livejournal
mailru sharing button mailru
medium sharing button medium
meneame sharing button meneame
messenger sharing button messenger
odnoklassniki sharing button odnoklassniki
pinterest sharing button pinterest
print sharing button print
qzone sharing button qzone
reddit sharing button reddit
refind sharing button refind
renren sharing button renren
skype sharing button skype
snapchat sharing button snapchat
surfingbird sharing button surfingbird
telegram sharing button telegram
tumblr sharing button tumblr
twitter sharing button twitter
vk sharing button vk
wechat sharing button wechat
weibo sharing button weibo
whatsapp sharing button whatsapp
wordpress sharing button wordpress
xing sharing button xing
yahoomail sharing button yahoomail