Banks disbursed Tk 22,125 crore in agricultural loans during July-February period of the 2024-25 financial year, achieving 58 per cent of the total disbursement target for FY25, according to Bangladesh Bank data.
The recovery of agricultural loans stood at Tk聽24,423 crore in the first eight months of FY25, reflecting a 7.77 per cent increase compared with that in the same period of the previous year.
The central bank had set an agricultural loan disbursement target of Tk 38,000 crore for FY25, an 8.57 per cent increase from Tk聽35,000 crore in FY24.
The central bank set the farm loan release target to increase agricultural production to control inflationary pressures and achieve gross domestic product growth target.
As of February 2025, the outstanding balance, including interest, reached Tk聽57,066 crore, marking a 2.15 per cent rise from the previous financial year.
Overdue of agricultural credit stood at Tk聽10,234 crore at the end of February 2025, which is 9.64 per cent higher than the overdue of Tk聽9,334 crore at the end of February 2024.
State-owned commercial banks and specialised banks disbursed Tk聽9,208 crore in the first eight months of FY25, covering 73 per cent of their Tk聽12,615 crore target.
Private and foreign banks provided Tk聽12,917 crore, fulfilling 50.89 per cent of their Tk聽25,385 crore disbursement goal in FY25.
Among different agricultural sectors, crop farming received the highest share of loans of Tk聽10,555 crore, followed by livestock and poultry at Tk聽5,348 crore, fisheries Tk聽3,290 crore and poverty alleviation loan of Tk聽810 crore.
As agriculture plays a vital role in the country鈥檚 economy, issuing credit to farmers has become crucial to keeping the agriculture-based rural economy vibrant, especially amid the ongoing global economic crisis.
More than 40 per cent of the country鈥檚 workforce is directly employed in the agriculture sector.
Farm loans enable farmers to invest in inputs like seeds, fertilisers and machinery, leading to increased productivity and economic growth.
Farm loans also contribute to rural development by providing income opportunities and improving infrastructure in rural areas.
On May 22, 2022, the central bank instructed the country鈥檚 banks to disburse agricultural credit at a concessional interest rate of 4 per cent for cultivating import substitute crops, including pulses, oilseeds, spices and maize.
Banks disbursed Tk聽37,154 crore in agricultural and rural loans in FY24 compared with that of Tk 32,830 crore disbursed in FY23.
Most of these loans were channelled through non-government organisations, which charge interest rates ranging from 24 to 30 per cent.
To address the challenge of reaching remote areas, banks allocated loan amounts to NGOs.
To encourage direct lending to farmers, the Bangladesh Bank has instructed banks to disburse a minimum of 50 per cent of their total disbursements through their own channels.
