Banks disbursed Tk聽32,211 crore in agricultural loans during July-May period of the 2024-25 financial year, achieving 84.76 per cent of the total disbursement target for FY25, according to Bangladesh Bank data.
The recovery of agricultural loans stood at Tk聽33,890 crore in the first 11 months of FY25, reflecting an 8.25 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聽38,000 crore for FY25, an 8.57 per cent increase from Tk聽35,000 crore in FY24.
The target of agricultural credit disbursement comprises Tk聽3,315crore for state-owned commercial banks, Tk 9,300 crore for state-owned specialised banks, Tk 24,121 crore for private commercial banks, and Tk聽1,264 crore for foreign commercial banks for FY25.
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 May 2025, the outstanding balance of agricultural credit, including interest, reached Tk聽58,320 crore, marking a 3.53 per cent rise from the previous financial year.
Overdue of agricultural credit stood at Tk聽9,851 crore at the end of May 2025, which is 0.87 per cent lower than the overdue of Tk 9,937 crore at the end of May 2024.
Among different agricultural sectors, crop farming received the highest share of loans of 48 per cent, followed by livestock and poultry at 24 per cent, fisheries 15 per cent and poverty alleviation loan of 4 per cent.
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 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.
